The Central Bank of Kenya (CBK) classifies banks into three tiers based on a variety of metrics, including net assets, capital, reserves, customer deposits, and the number of loans and deposit accounts. Tier 2 banks are categorized as medium-sized banks and command a combined market share of 16.29%, according to the latest 2023 Bank Supervision Annual Report.
Tier 2 banks play a pivotal role in Kenya’s banking ecosystem. While they may not have the vast asset base of Tier 1 banks, they offer a wide range of financial products and are often more accessible to small and medium-sized enterprises (SMEs) and individuals. These banks bridge the gap between the large national players and smaller, community-focused banks.
Here’s an updated list of all Tier 2 banks in Kenya, including their total net assets and market size index as of the 2023 report:
- Bank of Baroda (K)
- Total Net Assets: Ksh 201,938,448,000
- Market Share: 2.8%
- Citibank N.A. Kenya
- Total Net Assets: Ksh 166,064,763,000
- Market Share: 2.7%
- National Bank of Kenya
- Total Net Assets: Ksh 151,772,199,000
- Market Share: 2.3%
- Family Bank
- Total Net Assets: Ksh 142,315,712,000
- Market Share: 1.8%
- Bank of India
- Total Net Assets: Ksh 103,082,409,000
- Market Share: 1.8%
- National Bank of Kenya (Duplicate Entry with Varying Asset Figure)
- Total Net Assets: Ksh 161,106,364,000
- Market Share: 1.7%
- SBM Bank (Kenya)
- Total Net Assets: Ksh 94,919,435,000
- Market Share: 1.1%
- Ecobank Kenya
- Total Net Assets: Ksh 103,936,673,000
- Market Share: 1.0%
Understanding Tier 2 Banks’ Role in the Kenyan Economy
Tier 2 banks serve a critical role in Kenya’s financial services industry. With their substantial but mid-sized asset bases, these banks have more flexibility than Tier 1 banks, often focusing on niche markets, SMEs, and specific industry sectors. They have the capability to offer highly competitive products in areas like personal loans, SME financing, and trade finance.
Many Tier 2 banks are either subsidiaries of large international banks or well-established regional players. This gives them access to global financial resources while still maintaining a localized focus.
Growth of Tier 2 Banks in Kenya
In recent years, some Tier 2 banks have shown significant growth by expanding their services and increasing their customer base. For instance, Family Bank has been making significant strides with its innovative digital banking services, while SBM Bank has been expanding its reach after acquiring key assets from Chase Bank in 2018.
Despite their smaller size compared to Tier 1 banks, Tier 2 banks have continued to show resilience amid economic challenges, helping to enhance financial inclusion across Kenya. Their importance is expected to grow as the country’s economy diversifies and more Kenyans and businesses require tailored banking solutions.
For further details and regular updates, consult the Central Bank of Kenya’s Bank Supervision Reports available online.
