Four lenders had not met the December 2025 minimum core capital requirement of Sh3 billion and remained non-compliant at the end of March, reflecting the strain of the new rules ahead of an even higher threshold later this year.
Banks’ disclosures for the quarter ended March 31, 2026 show that Credit Bank, Consolidated Bank of Kenya, Development Bank of Kenya and Access Bank Kenya had core capital below Sh3 billion, putting them in breach of regulatory requirements.
Under the Business Laws (Amendment) Act, 2024, banks were required to raise minimum core capital to Sh3 billion from Sh1 billion by the end of December 2025, triggering a wave of fundraising across the sector.
The law requires lenders to increase minimum core capital further to Sh5 billion by the end of 2026, Sh6 billion by the close of 2027, Sh8 billion in 2028 and Sh10 billion by the end of 2029.
The revised capital requirements have put pressure on smaller lenders. At the end of September last year, 10 banks had core capital below Sh3 billion.
The 10 lenders had a combined core capital of Sh15.58 billion, leaving them needing at least Sh14.41 billion to comply with the revised Central Bank of Kenya (CBK) rules.
Capital race
Six of the 10 lenders – M-Oriental Bank, Africa Banking Corporation (ABC), Middle East Bank Kenya, CIB Kenya, Premier Bank and UBA Kenya – have since raised their core capital above Sh3 billion, leaving only four still seeking compliance.
Credit Bank, which closed March with a capital shortfall of Sh1.63 billion, is racing to raise fresh capital after shareholders approved a plan in a mid-December 2025 extraordinary general meeting to raise Sh4.5 billion through a private placement.
Two key shareholders of Credit Bank – ShoreCap III LP and Sansora Group of Companies – committed to the CBK that they would inject Sh1 billion each into the lender.
“Pursuant to the shareholder approval of the capital-raising initiatives at the EGM held on December 19, 2025, the board and management continue to implement various capital-raising measures, particularly the private placement offer and the pursuit of other strategic partnerships aimed at bridging the capital gap, alongside strengthened and more aggressive recovery efforts,” Credit Bank said in commentary accompanying its first-quarter earnings.
Consolidated Bank acting chief executive Dominic Murage said the lender had developed a “comprehensive capital build-up and restoration plan” aimed at achieving compliance with regulatory requirements while supporting growth ambitions.
“Raising additional capital to finance growth and maintain healthy regulatory ratios is of paramount importance and the board has put in place a clear capital build-up plan to achieve the required capital requirements,” said Dr Murage.
Compliance pressure
Another State-owned lender, Development Bank of Kenya, has not disclosed plans to raise fresh capital. The lender closed March with core capital of Sh2.17 billion, leaving a shortfall of Sh826.97 million.
Access Bank Kenya closed December with core capital of Sh1.1 billion and requires at least Sh1.89 billion to meet the minimum threshold.
The lender, alongside National Bank of Kenya (NBK), is owned by Nigeria’s Access Bank Group and is counting on a merger with NBK to achieve compliance.
“The directors confirm that this [capital shortfall] is expected to be fully addressed through the proposed merger with National Bank of Kenya Limited, which will strengthen the combined entity’s core capital position and ensure compliance with the regulatory requirement,” the lender said.
NBK, which closed March with core capital of Sh12.4 billion, is already compliant, positioning the merged entity to meet the regulatory threshold once the transaction is completed. Access Bank Group acquired NBK from KCB Group.
The clock is now ticking towards another increase in minimum core capital to Sh5 billion by the end of this year, creating fresh pressure for smaller lenders.
Earlier last year, the CBK asked 24 banks whose core capital was below the final target of Sh10 billion to submit plans detailing how they intended to raise fresh capital to meet the enhanced requirements.
The Treasury first proposed an increase in banks’ minimum capital during the reading of the 2024 budget, arguing that the move was necessary to strengthen the stability of a sector that now holds more than Sh6.393 trillion in deposits.
Kenya’s higher capital threshold, the first increase in 12 years, mirrors similar moves in neighbouring Uganda and Tanzania.
The banking sector has changed significantly since the Sh1 billion minimum capital requirement was introduced in 2012. Total assets have grown to more than Sh8.624 trillion as of February this year, up from Sh2.3 trillion 13 years ago.
