Kenyan banks with operations in South Sudan recorded significant growth in the year ended December 31, 2025, signalling a turnaround after years of struggle in a fragile environment weighed down by political and economic turmoil, as well as monetary losses linked to hyperinflation accounting adjustments.

But questions remain about the sustainability of this performance amid renewed and prolonged civil conflict, alongside macroeconomic headwinds including rising inflation, cash and forex shortages, and depreciation of the South Sudanese pound.

The unpredictability of monetary and fiscal policy, driven by frequent changes of central bank governors and finance ministers, has also severely affected businesses in the country.

Some market analysts attribute the improved performance of Kenyan banks in Juba to the resumption of oil exports, although volatility in supply remains a major concern for policymakers and businesses.

Profit reboundAudited results show that Co-operative Bank, KCB and Stanbic Bank made profits, while Equity Group reported a loss.

Co-op Bank recorded a profit before tax of Ksh236.3 million ($1.83 million), up from Ksh11.1 million ($86,046) the previous year.

Melodie Gatuguta, research associate (banking) at Standard Investment Bank, attributed the lenders’ performance partly to the resumption of crude oil exports. On Co-op’s performance, she noted that its joint venture with the South Sudan government means it “may have institutions as clients, as well as NGOs and other players in key economic sectors.”KCB’s subsidiary made a net profit of Ksh837 million ($6.48 million), from a net loss of Ksh453 million ($3.51 million) in 2024, while return on equity rose to 45.9 percent from negative 21.9 percent. KCB operates 16 branches, and its customer base declined to 159,000 in 2025 from 186,000 in 2024, according to the group’s financial statements.

Stanbic Holdings’ unit reported a net profit of Ksh233 million ($1.86 million), a 32 percent increase from Ksh176 million ($1.36 million) in 2024.

Equity Group reported a net loss of Ksh100 million ($775,193), with return on equity and return on assets at negative 2.4 percent and negative 0.5 percent respectively.

Dan Owuor, an independent market analyst based in Nairobi, said performance in South Sudan has been volatile, not only for Co-operative Bank but also for Stanbic and KCB.“The macro risks from geopolitical strife have affected operational efficiency. Reliance on fiscal flows is largely unsustainable in my view but is expected to persist for as long as long-term political instability exists,” Mr Owuor said.

The four banks entered South Sudan after the 2005 peace deal, attracted by a large unbanked population and oil wealth.

KCB started operations in the country in 2006, Equity in 2009 and Co-op in 2013. However, political instability, declining oil production, hyperinflation, depreciation of the South Sudanese pound, and liquidity and forex shortages have taken a heavy toll on businesses, including commercial banks.

In 2014, KCB shut three branches after conflict broke out, and in 2017 Equity followed by closing seven of its 12 branches. Co-op currently operates six branches in South Sudan.

Policy strainThe government views Co-op as a key player in mobilising domestic tax revenues and is relying on its Juba subsidiary to help collect SSP1.78 trillion ($13.66 billion) in non-oil revenues in the 2025/26 fiscal year.

The government of South Sudan owns a 49 percent stake in Co-operative Bank (South Sudan), with the remaining 51 percent held by the parent, Co-operative Bank Group (Kenya).

The lender is a key partner appointed by the Ministry of Finance and Economic Planning for revenue collection. It offers services to streamline tax payments, including dedicated units for tax, duties and fee collection at branches in Kololo, Malakia, Nimule and Juba International Airport.

As Juba seeks to foster economic recovery through non-oil revenue growth, it is also promoting investment in sectors such as mining and agriculture to reduce reliance on oil, which remains vulnerable to falling production and global price volatility.‎In February, President Salva Kiir dismissed Finance Minister Bak Barnaba Chol after just three months in office as the government scrambled to contain mounting cash shortages. He appointed economist Salvatore Garang as his replacement.

Garang previously held the post between 2018 and 2020, a period marked by economic reforms, fiscal strain and the challenges of managing a fragile transitional coalition government under the 2018 peace agreement.

The Bank of South Sudan convened an emergency meeting with commercial banks in February to consider measures to contain the deepening liquidity crisis, amid renewed fighting between government and opposition forces in Jonglei State, north of the capital Juba.

The meeting followed the dismissal of Mr Chol, who had struggled to rein in corruption and improve the cash position.

Earlier, central bank governor Johnny Ohisa Damian warned that the country was undergoing “severe” economic shocks and pledged policy measures to stabilise liquidity, prices and broader macroeconomic conditions.

South Sudan relies on oil for more than 90 percent of its revenues, but exports via Port Sudan were interrupted after pipeline damage during Sudan’s civil war in 2023. Shipments halted in April 2023 and resumed in January 2025 after extensive repairs.

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