Mid-Tier Lenders Showcase Strong Growth

NAIROBI, KENYA – Several of Kenya’s leading banks have reported robust profit growth in the third quarter of 2025, underscoring the sector's resilience amid a cautiously optimistic economic outlook. NCBA Group, Diamond Trust Bank (DTB), and I&M Group PLC all posted significant increases in their nine-month earnings, joining top-tier banks in a sector-wide profit boom. The results, announced on Thursday, November 20, 2025 (EAT), reflect a combination of rising interest income, strategic digital innovation, and prudent risk management.

NCBA Group PLC reported an 8.5% increase in its profit after tax to KSh 16.4 billion for the period ending September 30, 2025, up from KSh 15.1 billion in the same period last year. The growth was largely driven by a 13.8% rise in operating income to KSh 53.4 billion. A key driver for NCBA was its digital lending segment, which disbursed KSh 1 trillion in loans, a 35% year-on-year increase. Group Managing Director John Gachora attributed the performance to "prudent cost of funding management and better asset quality."

Similarly, I&M Group PLC announced a substantial 27% rise in its profit after tax to KSh 12.7 billion. The group's profit before tax grew by 26% to KSh 17.8 billion. This performance was supported by a 20% growth in operating income, with both net interest income and non-funded income streams showing strong results. The group's regional subsidiaries in Tanzania, Rwanda, Uganda, and Mauritius contributed 23% to the overall profit before tax, highlighting the success of its diversification strategy across East Africa.

Diamond Trust Bank (DTB) also posted a strong performance, with its profit after tax for the third quarter rising by 12.3% to KSh 8.36 billion. This growth was primarily fueled by a 17.9% increase in net interest income, which reached KSh 25.13 billion, supported by an expanding loan book. DTB’s customer deposits grew by 15.5% to KSh 510.26 billion, providing a solid funding base for its lending activities.

Broader Industry Trends and Economic Context

The strong earnings from these banks mirror a wider trend of profitability across the Kenyan banking sector in 2025. Larger institutions like KCB Group and Absa Bank Kenya have also reported positive results. KCB Group's profit after tax for the nine months grew by 3.3% to Sh47.3 billion. Absa Bank Kenya recorded a 14.7% increase in its nine-month profit to KSh 16.9 billion. This sector-wide profitability comes against the backdrop of a Kenyan economy that has shown resilience. Projections from the African Development Bank indicate a GDP growth of 5.6% for 2025, driven by the services sector and household consumption. Inflation is also expected to ease, creating a more stable macroeconomic environment.

However, the operating environment is not without its challenges. The banks have had to navigate the pressures of increased operating expenses and the need for higher provisions for potential loan losses. For instance, NCBA’s operating expenses rose by 14%, and its provision for credit losses increased by 24.5% to KSh 5.1 billion. Similarly, DTB increased its loan loss provisions by 7.6% to KSh 5.67 billion. These figures point to underlying risks in the lending environment, which Fitch Ratings notes will see impaired loan ratios remain elevated into 2026, partly due to outstanding public-sector arrears. Despite these risks, Fitch maintains a positive outlook, stating that the sector's high pre-impairment operating profit is sufficient to absorb these charges.

Implications for Kenya and the Region

The sustained profitability of Kenya's banking sector is a crucial indicator of the country's economic health and has significant implications for the wider East African region. A strong and profitable banking sector is better positioned to provide the necessary credit to businesses and individuals, fueling investment, consumption, and overall economic growth. The expansion of Kenyan banks into neighbouring countries, as demonstrated by I&M Group's performance, also contributes to regional financial integration and stability. The focus on digital financial services, a key growth driver for NCBA, is enhancing financial inclusion across the region. As these banks continue to grow, their performance will be a key factor in the economic trajectory of Kenya and its neighbours, supporting trade and investment across East Africa.