The Nairobi Securities Exchange (NSE) has launched a Banking Sector Index to track 11 listed banks in Kenya.
In a notice issued on Wednesday, October 1, NSE stated that the new Banking Sector Index will take effect from October 1, 2025.
It noted that the index will act as a transparent benchmark, support Exchange Traded Funds (ETFs), and enhance market activity.
“The Nairobi Securities Exchange Plc (NSE) today announced the launch of its Banking Sector Index, a market capitalization-weighted and float-adjusted benchmark designed to provide investors with a transparent and reliable measure of the performance of the banking sector,” read the notice in part.
“The NSE Banking Sector share index is designed to represent the performance of all listed Commercial Banks on the Nairobi Securities Exchange, providing investors with a comprehensive and complementary benchmark to measure the performance of the Kenyan Banking Stocks.”
NSE Banking Index to Track Performance of KCB, Equity, and 9 Other Banks
NSE noted that the new index will track the performance of freely tradable shares of all listed banking institutions.
Kenyan-listed banks whose performance will be tracked include KCB Group Plc, Equity Group Holdings Plc, The Co-operative Bank of Kenya Ltd, Absa Bank Kenya Plc, and NCBA Group Plc.
Others are BK Group Plc, Diamond Trust Bank Kenya Ltd, HF Group Plc, I&M Group Plc, and Stanbic Holdings Plc.
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NSE highlighted that the Banking Sector Index is expected to deliver wide-ranging benefits to the market by serving as a transparent benchmark to guide portfolio allocation and investment decision-making.
According to the NSE, this will enhance visibility for listed banks while supporting sector-based research and analysis.
“It will equally provide a foundation for product innovation such as Exchange Traded Funds (ETFs) and other index-linked products, thereby deepening market activity and broadening investor participation,” NSE said.
Banking Index to Track Sector Performance and Drive Market Activity
Commenting on the launch, NSE Chief Executive Frank Mwiti stated that the milestone underscores NSE’s commitment to innovation and the continuous development of products that meet evolving investor needs while strengthening Kenya’s capital markets.
“The launch of the Banking Sector Index is fully aligned with our new strategy of driving product diversification and deepening market activity,” he added.
“This is a critical step in positioning the NSE as a modern, globally competitive marketplace.”
According to Mwiti, beyond providing investors with a reliable performance tracker, the Index will highlight the banking sector as a key driver of economic growth and create a strong foundation for future product innovation.
Between January and September 2025, the banking sector demonstrated strong performance driven by robust earnings, balance sheet expansion, and ongoing innovations in financial services.
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This strong performance underscores the sector’s pivotal role in driving activity within the capital markets and the broader economy.
The ground rules for the Banking Sector Index can be accessed through the following link: https://www.nse.co.ke/rules/
The NSE Banking Sector Share Index is calculated using the base-weighted aggregate methodology, also known as the market capitalisation/value weighted methodology, float adjusted, which means that the index level reflects the total tradable market value of component stocks relative to a particular base period.
The float is adjusted to reflect the portion of the Issued shares available in the CDSC system trading account.
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