Top lenders from Nigeria and South Africa, two of the continent’s biggest economies, are scrambling for a share of the banking market in East Africa as the region’s retail and trade finance business presents mouth-watering opportunities for banking conglomerates seeking to boost revenues and provide decent returns to shareholders.

According to the African Development Bank (AfDB), lenders are aggressively increasing their presence in East Africa, home to some of the fastest-growing economies in Africa.

Market analysts say that this scramble is largely motivated by the desire to increase incomes through trade finance within the African Continental Free Trade Area (AfCFTA) corridor and to mitigate the risks of poor economic performance and currency volatility in their home markets by capitalising on the growth prospects of East Africa.

Furthermore, Kenya is seen as the regional hub for financial services, trade and logistics, among other things. Consequently, West African and South African banks may seek to tap into trade finance flows within the AfCFTA corridor and Kenya’s sophisticated fintech ecosystem to scale digital lending and payment systems,” said Melodie Gatuguta, Banking Research Associate at Standard Investment Bank.

Financial analystDan Owuor, an independent financial analyst based in Nairobi, said that headwinds from currency volatility, compliance and regulations in West Africa, and market maturity and economic slowdown in South Africa, have caused these lenders to start looking to East Africa for continental integration and strategic positioning for clients with regional intentions or exposure.“There are structural shifts emerging that raise systematic risks in their anchor markets, and Kenyan banks offer a gateway to East Africa through which to deleverage and diversify away from dependency on their home markets,” said Mr Owuor.“Headwinds from currency volatility, compliance and regulations in West Africa, as well as market maturity and economic slowdown in Southern Africa, have led to a shift in focus towards East Africa, both for continental integration and for strategic positioning of clients with regional intentions or exposure.”In Kenya, every bank is expected to meet a minimum core capital requirement of Sh5 billion ($38.75 million) by the end of this year and Sh10 billion ($77.51 million) by 2029.“Internally, CBK guidelines intend to raise core capital requirements by 2029, which puts pressure on undercapitalised banks to raise funds within the grace period through mergers and acquisitions,” added Mr Owuor.

Financial needs“There are high-value sectors with significant and sophisticated financial needs in terms of capital expenditure or working capital. Foreign banks have the necessary risk tolerance and expertise to syndicate and underwrite such transactions on a competitive scale relative to domestic banks.”The Kenyan Bankers Association (KBA) says that foreign banks are looking to Kenya as a ‘good’ launch pad for their operations across the entire East African region, with Nairobi offering foreign banks easier access to the region.“Kenya remains an economic and financial hub for eastern Africa, with top banking brands establishing a presence in the country,” said Raimond Molenje, the association’s chief executive.

He added that eight banks (local and foreign) are already seeking to expand beyond Kenya into the region.“Foreign banks see the ease of gaining entry to Kenya through our open policy towards foreign investors. For example, licence fees are not differentiated between foreign and local banks, and foreign banks find it relatively easy to buy stakes in existing banks.”According to the KBA, Kenya’s digitalisation of banking, which leverages mobile payment services, is an attractive way of delivering financial services to a large population at a lower cost.“We also have a very progressive market that seeks to address challenges affecting the banking sector. The participatory policy framework, anchored in our constitution, ensures that the views of market players are critical in shaping market development. This endears investors to the country,’ said Molenje.

South Africa’s Standard Bank Group (operating as Stanbic Bank) has a strong and growing presence in East Africa, offering corporate, investment and personal banking services to promote regional growth. Its key operations include subsidiaries in Kenya, Uganda, Tanzania, South Sudan and the Democratic Republic of the Congo (DRC), as well as a representative office in Ethiopia. The company leverages Nairobi as a regional hub.

The company is also accelerating its plans to consolidate its two banks in Tanzania, in order to leverage the country’s infrastructure investments and tap into emerging opportunities.

In January, Nedbank Group Ltd announced that it had agreed to acquire a majority stake in Kenya’s NCBA Group Plc to help it expand in East Africa. Meanwhile, FirstRand is actively exploring entry into the Kenyan market.

Absa is also seeking opportunities to expand its operations in East Africa’s biggest economy. “We see Kenya as an important growth opportunity for us, and we continue to look for ways to increase our capital allocation there,’ Group Financial Director Deon Raju told Bloomberg on March 10.

Strategic acquisitionsMeanwhile, Nigerian pan-African banking groups Access Bank, United Bank for Africa (UBA) and Guaranty Trust Bank (GTB) are expanding aggressively into East Africa, primarily Kenya, Tanzania, Rwanda and Uganda. This expansion is driven by trade financing opportunities under the AfCFTA, digital banking and strategic acquisitions.

These lenders are positioning themselves to control Africa’s links to global financial gateways in India, Dubai and China, as well as to secure the lucrative trade financing deals offered by the continent’s free market of 1.3 billion people under the AfCFTA.

In 2024, GTB increased its shareholding in its Kenyan subsidiary from 71.01 percent to 76.9 percent, signifying rising competition for the East African market from lenders in the West African nation.

The GTB group has extended its regional presence in East Africa by acquiring a 70 percent stake in Fina Bank Ltd, a commercial bank incorporated in Kenya with subsidiaries in Uganda and Rwanda, since 2013. It also operates in Tanzania.

UBA, for its part, acquired an additional 13 percent and 11 percent stake in UBA Kenya and UBA Uganda Ltd, respectively, in 2022. This signals the growing appetite of Nigerian lenders to invest in the East African market, which has a population of over 300 million.

Access Bank says it is seeking to deepen its retail banking presence in Africa and expand the trade correspondent capabilities of its international subsidiaries, including initiating banking operations in global trade hubs outside Africa, as part of its five-year strategic plan (2023–2027).

Access Bank’s key operations in the region include the acquisitions of Transnational Bank in 2020 and National Bank of Kenya in 2025.

GTB operates in Kenya, Rwanda and Uganda. It entered the Kenyan market by acquiring the Fina Bank Group in 2013. The bank has consistently increased its shareholding in its Kenyan subsidiary.

Zenith Bank is entering the region by acquiring Kenya’s Paramount Bank. This deal received approval from the Competition Authority of Kenya (CAK) in January 2026.

East African lenders are targeting the mass market with standardised products, aiming for high-volume, low-cost operations and economies of scale to increase their revenue.

Checking accountsThis model focuses on providing essential services, such as checking accounts, savings and basic loans, to the public and often relies heavily on digital promotion.

According to global management consultancy firm McKinsey, the mass market — individuals earning less than $6,000 per annum — is the fastest-growing customer segment, and one to “watch”, with 70 percent of revenues in Africa’s retail banking sector coming from the middle-class segment, defined as individuals with an annual income of between $6,000 and $36,000.

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