Access Bank Kenya and Consolidated Bank of Kenya are facing heightened regulatory pressure under the Central Bank of Kenya’s (CBK) newly enforced capital adequacy rules, which mandate a phased increase of core capital from Sh1 billion to Sh10 billion by 2029. Both lenders are currently operating below even the existing minimum, raising concerns over potential license downgrades or forced restructuring.
Under the Business Laws (Amendment) Act, 2024, signed in December last year, all commercial banks must meet tiered capital thresholds starting with Sh3 billion by December 2025. The requirement gradually increases to Sh5 billion in 2026, Sh7 billion in 2027, Sh8 billion in 2028, and finally Sh10 billion by 2029. The CBK’s move aims to strengthen financial sector resilience, align with regional peers, and boost the industry’s ability to finance large-scale projects.
Access Bank Kenya
Access Bank Kenya, a subsidiary of Nigeria’s Access Holdings Plc, finds itself at one of the weakest starting points in the sector. As of December 31, 2024, the bank reported core capital of only Sh152 million, far below the current Sh1 billion threshold and far behind the Sh3 billion requirement due by end of 2025. The bank would need to raise an estimated Sh1.7 billion within the next eight months to avoid breaching regulatory requirements.
Access Bank’s woes are compounded by its recent financial performance. The lender posted a Sh1.2 billion loss in 2024, a reversal from the Sh1.2 billion core capital level reached temporarily in 2023 after a Sh1 billion injection from its Nigerian parent. In 2022, it had already shown signs of financial stress with a loss of Sh233.5 million.
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Dependence on Access Holdings Plc may no longer be a reliable fallback. The parent company now faces increased capital requirements in Nigeria, where commercial banks must raise their minimum capital to 500 billion naira (approximately Sh48 billion), potentially limiting future support for the Kenyan unit.
Consolidated Bank
Consolidated Bank of Kenya is in even more dangerous territory. The state-owned lender reported a negative core capital of Sh525 million as of December 2024, making it the only bank in the sector with a capital position below zero. Burdened by accumulated losses of Sh4.45 billion and a long-standing deficiency in core capital, previously reported at Sh1.4 billion in September 2023, the bank must raise at least Sh3.7 billion by year-end to meet the Sh3 billion interim requirement.
As a government-owned entity, Consolidated Bank’s ability to raise capital is limited by public sector funding constraints. The Kenyan government’s fiscal challenges, including high debt levels, may restrict its ability to inject fresh capital into the bank.
The bank has struggled to generate substantial profits, making it reliant on external funding rather than internal resources. Fitch Ratings noted that smaller banks like Consolidated, which account for just 7% of sector assets, are unlikely to meet the new requirements through earnings retention alone due to large capital shortfalls and weak profitability.
Read: Why CBK’s New Sh10 Billion Core Capital Requirement May Hurt Bank Customers
According to CBK data as of September 2024, 24 out of the country’s 38 commercial banks had core capital below Sh10 billion, with 12 below Sh3 billion. Other small lenders under pressure include UBA Kenya, Development Bank, Middle East Bank, and M-Oriental Bank.
While some of these banks may rely on retained earnings to meet the rising capital thresholds, many are expected to pursue mergers, acquisitions, or even exits. The Kenya Bankers Association had lobbied for an extended eight-year compliance window, but CBK adopted a tighter five-year timeline to accelerate sector consolidation and protect depositors.
Jefferson Wachira is a writer at Africa Digest News, specializing in banking and finance trends, and their impact on African economies.