11 commercial banks in Kenya risk losing their licenses unless they raise a combined Ksh15 billion in core capital by December 2025, as mandated by the Central Bank of Kenya (CBK) under new regulatory requirements.
The affected lenders are under pressure to meet the new minimum core capital threshold of Ksh3 billion, which was increased from Ksh1 billion in under four months, following reforms introduced by the Business Laws (Amendment) Act of 2024.
According to CBK’s assessment of financial statements for the quarter ending June 2025, the banks falling short include Paramount Bank, M Oriental, ABC Bank Kenya, Premier Bank, CIB International Bank, Middle East Bank Kenya, and Development Bank of Kenya (DBK).
Others on the list are UBA Kenya Bank, Credit Bank PLC, Access Bank Kenya, and Consolidated Bank of Kenya.
State-owned Consolidated Bank has the highest capital shortfall at Ksh3.7 billion, having widened its deficit from Ksh643.8 million to Ksh701 million in just one quarter.
Other banks with capital deficits over Ksh1 billion include:
- Access Bank Kenya – Ksh3.4 billion
- Credit Bank PLC – Ksh1.72 billion
- UBA Kenya Bank – Ksh1.51 billion
- CIB International Bank – Ksh1.09 billion
Paramount Bank and DBK are facing lighter deficits of Ksh260 million and Ksh930 million, respectively.
Rescue Plans Underway
CBK expects the lenders to pursue a mix of strategies, including stake sales, mergers, shareholder rights issues, or capital injections from parent companies.
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UBA Kenya Bank, for instance, told NTV it is seeking new capital from its parent firm, United Bank for Africa (UBA) PLC in Nigeria.
At least two other banks have approached the CBK for approvals to sell stakes to potential investors.
Some of the affected banks are subsidiaries of foreign institutions and are leaning on cross-border support to stabilize operations.
The capital crunch has been exacerbated by continued financial losses in the first half of 2025, which further eroded the funding base of several banks.
Why CBK Raised Minimum Core Capital
CBK had raised the minimum core capital requirement for new banks to Ksh 10 billion, as stipulated in the Business Laws (Amendment) Act, 2024.
Under the 2024 law, banks are required to gradually raise their core capital to Ksh10 billion over five years, with Ksh3 billion being the first milestone by the end of this year.
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The regulator revealed this at a virtual post-Monetary Policy Committee (MPC).
CBK Governor Dr. Kamau Thugge has defended the tighter requirements, saying they are aimed at boosting the sector’s resilience and long-term stability.
“The banking sector is facing too many risks, and it needs to have a strong capital base to mitigate the risks,” said Thugge in Nairobi.
The new capital threshold aims to ensure future banks are financially resilient and well-capitalised.
“As of December 2024, 24 out of the 38 commercial banks had core capital below 10 billion and CBK has asked the 24 banks to submit a board approved capital build-up plans by April 1st of 2025 and this will outline measures, timelines and milestones to meet the new capital requirements.” he added.
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