By Cytonn Research, Aug 17, 2025
During the week, T-bills were undersubscribed for the third time in three weeks, with the overall subscription rate coming in at 96.6%, lower than the subscription rate of 97.6% recorded the previous week. Investors’ preference for the shorter 91-day paper increased, with the paper receiving bids worth Kshs 4.9 bn against the offered Kshs 4.0 bn, translating to a subscription rate of 123.2%, higher than the subscription rate of 99.7%, recorded the previous week. The subscription rates for the 364-day paper decreased to 108.0% (Kshs. 10.8 bn against the offered Kshs 10.0 bn) from the 120.2% (Kshs. 12.0 bn against the offered Kshs 10.0 bn) recorded the previous week, while that of the 182-day paper increased to 74.6% (Kshs 7.5 bn against the offered Kshs 10.0 bn) from 74.1 % (7.4 bn against the offered Kshs 10.0 bn) recorded the previous week. The government accepted a total of Kshs 23.16 bn worth of bids out of Kshs 23.18 bn bids received, translating to an acceptance rate of 99.9%. The yields on the government papers were on a downward trajectory with the yields on the 364-day paper decreasing the most by 13.1 bps to 9.6% from the 9.7% recorded the previous week. The yields on the 91-day paper and 182-day paper decreased by 6.9 bps and 5.4 bps to 8.0% and 8.1% respectively, from the 8.1% and 8.2% respectively recorded the previous week;
During the week, the Central Bank of Kenya released the auction results for the re-opened treasury bonds IFB1/2018/015 and IFB1/2022/019 with tenors to maturities of 7.6 years and 15.6 years respectively and fixed coupon rates of 12.5% and 13.0% respectively. The bonds were oversubscribed, with the overall subscription rate coming in at 359.4%, receiving bids worth Kshs 323.4 bn against the offered Kshs 90.0 bn. The government accepted bids worth Kshs 95.0 bn, translating to an acceptance rate of 29.4%. The weighted average yield for the accepted bids for the IFB1/2018/015 and IFB1/2022/019 came in at 13.0% and 14.0% respectively. Notably, the 13.0% on the IFB1/2018/015 was higher than the 12.5% recorded the last time the bond was reopened in January 2018 while the 14.0% on the IFB1/2022/019 was higher than the 13.0% recorded the last time the bond was reopened in February 2022. Given the bonds are tax free, compared to 10.0% withholding tax for other long-term bonds, the effective tax yield is 14.4% and 15.6% for the IFB1/2018/015 and IFB1/2022/019 respectively. With the Inflation rate at 4.1% as of July 2025, the real returns of the IFB1/2018/015 and IFB1/2022/019 are 8.9% and 9.9%.
The Monetary Policy Committee met on August 12th, 2025, to review the outcome of its previous policy decisions against a backdrop of elevated uncertainties to the global outlook for growth, lower sticky in advanced economies heightened trade tensions as well as persistent geopolitical tensions. The MPC decided to lower the CBR rate by 25.0 bps to 9.50%, from 9.75%.
Also during the week, The Energy and Petroleum Regulatory Authority (EPRA) released their monthly statement on the maximum retail fuel prices in Kenya, effective from 15th August 2025 to 14th September 2025. Notably, the maximum allowed price for Super Petrol and Kerosene decreased by Kshs 1.0 each respectively, while the price for Diesel remained unchanged. Consequently, Super Petrol and Kerosene will now retail at Kshs 185.3 and Kshs 155.6 per litre respectively, from Kshs 186.3 and Kshs 156.6 per litre respectively while Diesel will now retail at Kshs 171.6 per litre, representing decreases of 0.5% and 0.6% for Super Petrol and Kerosene respectively;
During the week, the National Treasury gazetted the revenue and net expenditures for the first month of FY’2025/2026, ending 31st July 2025, highlighting that the total revenue collected as at the end of July 2025 amounted to Kshs 178.4 bn, equivalent to 6.5% of the original estimates of Kshs 2,754.7 bn for FY’2025/2026 and is 77.7% of the prorated estimates of Kshs 229.6 bn;
During the week, the equities market was on an upward trajectory, with NSE 20 gaining the most by 3.9%, while NSE 10, NSE 25 and NASI gained by 3.2%, 2.9% and 2.8% respectively, taking the YTD performance to gains of 32.2%, 29.7%, 24.3% and 23.9% for NASI, NSE 20, NSE 25 and NSE 10 respectively. The equities market performance was driven by gains recorded by large-cap stocks such as KCB, BAT and SCBK of 11.7%, 5.5% and 4.4% respectively. The performance was, however, weighed down by losses recorded by large cap stocks such as NCBA and EABL of 2.3% and 0.5% respectively;
During the week, four of the listed banks released their H1’2025 results. KCB Group released its H1’2025 financial results, with its Core Earnings per Share (EPS) increasing by 8.0% to Kshs 19.6, from Kshs 18.2 in H1’2024;
Co-operative bank released its H1’2025 financial results, with its Core Earnings per Share (EPS) increasing by 8.4% to Kshs 2.4, from Kshs 2.2 in H1’2024;
Absa Bank released its H1’2025 financial results, with its Core Earnings per Share (EPS) increasing by 9.1% to Kshs 2.0, from Kshs 2.2 in H1’2024;
Lastly, Equity group released its H1’2025 financial results, with its Core Earnings per Share (EPS) decreasing by 16.8% to Kshs 8.8, from Kshs 7.6 in H1’2024;
During the week, the European Investment Bank (EIB) made an equity investment in local developer, International Housing Solutions (IHS) Kenya, to help it deliver more than 3,000 affordable housing units in prime neighborhoods such as Nairobi and Kiambu;
During the week, International hotel chain, Mariott International announced that it is set to debut its luxury The Ritz-Carlton brand in Africa with an exclusive luxury tented safari lodge in the Maasai Mara. It is set to officially open on August 15th in a ceremony to be presided by Narok County Governor, Patrick Ole Ntuntu;
During the week, the International Finance Corporation (IFC) announced that it is proposing to make an equity investment of Kshs 1.3 bn in Safari holdings, the parent firm of ARP Africa Travel, Pollman’s Tours and Safaris and Tanzanian tour company, Ranger Safaris;
During the week, Kenya invited international development lenders to finance a USD 2.0 bn expansion of the Jomo Kenyatta International Airport located in Nairobi. This marks nine months after it cancelled a deal with India’s Adani Group after its founder, Gautam Adani, was indicted in the United States of America;
On the Unquoted Securities Platform, Acorn D-REIT and I-REIT traded at Kshs 26.7 and Kshs 22.9 per unit, respectively, as per the last updated data on 15th August 2025. The performance represented a 33.4% and 14.5% gain for the D-REIT and I-REIT, respectively, from the Kshs 20.0 inception price. Additionally, ILAM Fahari I-REIT traded at Kshs 11.0 per share as of 15th August 2025, representing a 45.0% loss from the Kshs 20.0 inception price. The volume traded to date came in at 1.2 mn shares for the I-REIT, with a turnover of Kshs 1.5 mn since inception in November 2015;
Insolvency in Kenyan real estate arises when a developer, property company, or project vehicle can no longer meet its financial obligations as they fall due, triggering procedures such as administration, receivership, or liquidation under the Insolvency Act, 2015. The sector’s capital-intensive nature means that even minor disruptions in cash flow can escalate quickly. Common triggers include excessive debt reliance, cost overruns from inflation or mismanagement, and delayed or failed off-plan sales that deprive projects of critical liquidity. Market oversupply can slow absorption rates, while legal disputes over land or planning approvals can stall construction and revenue. Broader economic pressures such as high interest rates, currency volatility, and tightened mortgage lending further strain developers. These dynamics have made insolvency more visible in recent years, with several notable cases in 2025 reflecting a combination of financing challenges, operational weaknesses, and adverse market conditions.
Investment Updates:
Hospitality Updates:
Money Markets, T-Bills Primary Auction:
During the week, T-bills were undersubscribed for the third time in three weeks, with the overall subscription rate coming in at 96.6%, lower than the subscription rate of 97.6% recorded the previous week. Investors’ preference for the shorter 91-day paper increased, with the paper receiving bids worth Kshs 4.9 bn against the offered Kshs 4.0 bn, translating to a subscription rate of 123.2%, higher than the subscription rate of 99.7%, recorded the previous week. The subscription rates for the 364-day paper decreased to 108.0% (Kshs. 10.8 bn against the offered Kshs 10.0 bn) from 120.2% (Kshs. 12.0 bn against the offered Kshs 10.0 bn) recorded the previous week, while that of the 182-day paper increased to 74.6% (Kshs 7.5 bn against the offered Kshs 10.0 bn) from the 74.1 % (7.4 bn against the offered Kshs 10.0 bn) recorded the previous week. The government accepted a total of Kshs 23.16 bn worth of bids out of Kshs 23.18 bn bids received, translating to an acceptance rate of 99.9%. The yields on the government papers were on a downward trajectory with the yields on the 364-day paper decreasing the most by 13.1 bps to 9.6% from the 9.7% recorded the previous week. The yields on the 91-day paper and 182-day paper decreased by 6.9 bps and 5.4 bps to 8.0% and 8.1% respectively, from the 8.1% and 8.2% respectively recorded the previous week.
The chart below shows the yield performance of the 91-day, 182-day and 364-day papers over the period:
The chart below compares the overall average T-bill subscription rates obtained in 2022, 2023, 2024 and 2025 Year-to-date (YTD):
Money Market Performance:
In the money markets, 3-month bank placements ended the week at 9.5% (based on what we have been offered by various banks). The yields on the government papers were on a downward trajectory with the yields on the 364-day paper decreasing the most by 13.1 bps to 9.6% from the 9.7% recorded the previous week while the yields on the 91-day paper decreased by 6.9 bps to 8.0% from the 8.1% recorded the previous week. The yield on the Cytonn Money Market Fund decreased by 12.0 bps to 13.2% from the 13.3% recorded the previous week, while the average yields on the Top 5 Money Market Funds decreased marginally by 1.4 bps to remain relatively unchanged from the 13.0% recorded the previous week.
The table below shows the Money Market Fund Yields for Kenyan Fund Managers as published on 15th August 2025:
Money Market Fund Yield for Fund Managers as published on 15th August 2025 |
||
Rank |
Fund Manager |
Effective Annual Rate |
1 |
Cytonn Money Market Fund ( Dial *809# or download Cytonn App) |
13.2% |
2 |
Gulfcap Money Market Fund |
13.1% |
3 |
Ndovu Money Market Fund |
13.1% |
4 |
Nabo Africa Money Market Fund |
12.9% |
5 |
Lofty-Corban Money Market Fund |
12.6% |
6 |
Orient Kasha Money Market Fund |
12.3% |
7 |
Etica Money Market Fund |
12.1% |
8 |
Kuza Money Market fund |
11.9% |
9 |
Arvocap Money Market Fund |
11.7% |
10 |
GenAfrica Money Market Fund |
11.3% |
11 |
Enwealth Money Market Fund |
11.1% |
12 |
Old Mutual Money Market Fund |
11.0% |
13 |
British-American Money Market Fund |
10.9% |
14 |
Madison Money Market Fund |
10.8% |
15 |
Jubilee Money Market Fund |
10.8% |
16 |
Faulu Money Market Fund |
10.3% |
17 |
Dry Associates Money Market Fund |
10.2% |
18 |
Apollo Money Market Fund |
10.2% |
19 |
Sanlam Money Market Fund |
10.1% |
20 |
KCB Money Market Fund |
9.6% |
21 |
Mali Money Market Fund |
9.3% |
22 |
Co-op Money Market Fund |
9.2% |
23 |
ICEA Lion Money Market Fund |
9.2% |
24 |
Genghis Money Market Fund |
9.0% |
25 |
Absa Shilling Money Market Fund |
8.6% |
26 |
CIC Money Market Fund |
8.5% |
27 |
Mayfair Money Market Fund |
8.5% |
28 |
AA Kenya Shillings Fund |
7.8% |
29 |
Ziidi Money Market Fund |
6.9% |
30 |
Stanbic Money Market Fund |
6.6% |
31 |
CPF Money Market Fund |
6.6% |
32 |
Equity Money Market Fund |
5.1% |
Source: Business Daily
Liquidity:
During the week, liquidity in the money markets marginally eased, with the average interbank rate decreasing by 7.2 bps, to 9.5% from the 9.6% recorded the previous week, partly attributable to government payments that were offset by tax remittances. The average interbank volumes traded increased by 27.5% to Kshs 9.8 bn from Kshs 7.7 bn recorded the previous week. The chart below shows the interbank rates in the market over the years:
Kenya Eurobonds:
During the week, the yields on Kenya’s Eurobonds were on a downward trajectory with the yield on the 13-year Eurobond issued in 2021 decreasing the most by 35.2 bps to 9.4% from the 9.8% recorded the previous week while the 30-year Eurobond issued in 2018 decreased the least by 11.3 bps to 10.0% from the 10.1% recorded the previous week. The table below shows the summary performance of the Kenyan Eurobonds as of 14th August 2025;
Cytonn Report: Kenya Eurobond Performance |
|||||||
|
2018 |
2019 |
2021 |
2024 |
2025 |
||
Tenor |
10-year issue |
30-year issue |
7-year issue |
12-year issue |
13-year issue |
7-year issue |
11-year issue |
Amount Issued (USD) |
1.0 bn |
1.0 bn |
0.9 bn |
1.2 bn |
1.0 bn |
1.5 bn |
1.5 bn |
Years to Maturity |
2.7 |
22.7 |
1.9 |
6.9 |
9.0 |
5.7 |
10.7 |
Yields at Issue |
7.3% |
8.3% |
7.0% |
7.9% |
6.2% |
10.4% |
9.9% |
2-Jan-25 |
9.1% |
10.3% |
8.5% |
10.1% |
10.1% |
10.1% |
|
1-Aug-25 |
7.8% |
10.3% |
- |
9.3% |
9.8% |
9.2% |
|
7-Aug-25 |
7.6% |
10.1% |
- |
9.0% |
9.8% |
8.9% |
|
8-Aug-25 |
7.6% |
10.1% |
- |
9.0% |
9.5% |
8.9% |
|
11-Aug-25 |
7.6% |
10.2% |
- |
9.1% |
9.6% |
8.9% |
|
12-Aug-25 |
7.6% |
10.2% |
- |
9.1% |
9.6% |
8.9% |
|
13-Aug-25 |
7.5% |
10.1% |
- |
9.0% |
9.4% |
8.8% |
|
14-Aug-25 |
7.4% |
10.0% |
- |
8.9% |
9.4% |
8.7% |
|
Weekly Change |
(0.2%) |
(0.1%) |
- |
(0.1%) |
(0.4%) |
(0.2%) |
- |
MTD Change |
(0.4%) |
(0.3%) |
- |
(0.4%) |
(0.4%) |
(0.5%) |
- |
YTD Change |
(1.6%) |
(0.2%) |
- |
(1.1%) |
(0.7%) |
(1.4%) |
- |
Source: Central Bank of Kenya (CBK) and National Treasury
Kenya Shilling:
During the week, the Kenyan Shilling depreciated marginally against the US Dollar by 0.1 bps, to remain relatively unchanged at Kshs 129.2 recorded the previous week. On a year-to-date basis, the shilling has appreciated by 5.1 bps against the dollar, compared to the 17.6% appreciation recorded in 2024.
We expect the shilling to be supported by:
The shilling is however expected to remain under pressure in 2025 as a result of:
Key to note, Kenya’s forex reserves increased marginally by 2.0% during the week, to USD 11.1 bn from the USD 10.9 bn recorded in the previous week, (equivalent to 4.9 months of import cover), and above the statutory requirement of maintaining at least 4.0-months of import cover and above the EAC region’s convergence criteria of 4.5-months of import cover.
The chart below summarizes the evolution of Kenya's months of import cover over the years:
Weekly highlights
The monetary policy committee met on August 12th, 2025, to review the outcome of its previous policy decisions against a backdrop of elevated uncertainties in the global economic outlook due to the lower inflation in advanced economies , heightened trade tensions as well as persistent geopolitical tensions. The MPC decided to lower the CBR rate by 25.0 bps to 9.50%, from 9.75% set in June 2025. Notably, inflation rates remain anchored and remained within the CBK preferred range of 2.5%-7.5% for the twenty fifth consecutive month, with an increase of 0.3% points to 4.1% in July 2025, from 3.8% in June 2025. Key to note, the MPC had cut the CBR rate to 9.75% in the previous meeting in June from 10.00% in April 2025. Below are some of the key highlights from the August meeting:
The MPC noted that overall inflation is expected to remain below the midpoint of the 2.5%-5.0% target range in the near term, supported by low food prices, stable energy prices, and exchange rate stability. Additionally, central banks in major economies have continued to lower interest rates at a cautious pace. The Committee also noted that the recent economic developments, created room for further easing of monetary policy to support economic activity while maintaining exchange rate stability. The MPC noted that it will continue to monitor the effects of these policy measures, as well as global and domestic economic developments, and will remain ready to take additional action if necessary. Going forward, we expect the MPC to adopt a more cautious approach to rate adjustments in the coming meetings in a bid to continue supporting the private sector, while also keeping an eye on the effect on the inflation and exchange rate. The next MPC meeting is scheduled for October 2025.
During the week, The Energy and Petroleum Regulatory Authority (EPRA) released their monthly statement on the maximum retail fuel prices in Kenya, effective from 15th August 2025 to 14th September 2025. Notably, the maximum allowed price for Super Petrol and Kerosene decreased by Kshs 1.0 respectively, while the price for diesel remained unchanged. Consequently, Super Petrol and Kerosene will now retail at Kshs 185.3 and Kshs 155.6 per litre respectively, from Kshs 186.3 and Kshs 156.6 per litre respectively, while diesel will remain unchanged at Kshs 171.6 per litre, representing decreases of 0.5% and 0.6% for Super Petrol and Kerosene respectively.
Other key take-outs from the performance include;
We note that fuel prices in the country have stabilized in recent months largely due to the government's efforts to stabilize pump prices through the petroleum pump price stabilization mechanism which expended Kshs 9.9 bn in the FY’2023/24 to cushion the increases applied to the petroleum pump prices, coupled with the stabilization of the Kenyan Shilling against the dollar and other major currencies, as well as a decrease in international fuel prices. Additionally, the government has reduced spending through the price stabilization mechanism, subsidizing Kshs 2.0 and Kshs 2.9 per litre for Diesel and Kerosene respectively, resulting in stabilization in fuel prices for the period under review. Going forward, we expect that fuel prices will stabilize in the coming months as a result of the government's efforts to mitigate the cost of petroleum through the pump price stabilization mechanism and a stable exchange rate. As such, we expect the business environment in the country to improve as fuel is a major input cost, as well as continued stability in inflationary pressures, with the inflation rate expected to remain within the CBK’s preferred target range of 2.5%-7.5% in the short to medium term.
During the week, the National Treasury gazetted the revenue and net expenditures for the first month of FY’2025/2026, ending 31st July 2025, highlighting that the total revenue collected as at the end of July 2025 amounted to Kshs 178.4 bn, equivalent to 6.5% of the original estimates of Kshs 2,754.7 bn for FY’2025/2026 and is 77.7% of the prorated estimates of Kshs 229.6 bn.
The National Treasury gazetted the revenue and net expenditures for the first month of FY’2025/2026, ending 31st July 2025. Below is a summary of the performance:
Item |
12-months Original Estimates |
Actual Receipts/Release |
Percentage Achieved of the Original Estimates |
Prorated |
% achieved of the Prorated |
Opening Balance |
6.4 |
||||
Tax Revenue |
2,627.1 |
171.5 |
6.5% |
218.9 |
78.4% |
Non-Tax Revenue |
127.6 |
0.4 |
0.3% |
10.6 |
3.9% |
Total Revenue |
2,754.7 |
178.4 |
6.5% |
229.6 |
77.7% |
External Loans & Grants |
569.8 |
0.0 |
0.0% |
47.5 |
0.0% |
Domestic Borrowings |
1,098.3 |
67.3 |
6.1% |
91.5 |
73.5% |
Other Domestic Financing |
10.8 |
0.0 |
0.0% |
0.9 |
0.0% |
Total Financing |
1,678.9 |
67.3 |
4.0% |
139.9 |
48.1% |
Recurrent Exchequer issues |
1,470.4 |
91.7 |
6.2% |
122.5 |
74.9% |
CFS Exchequer Issues |
2,141.0 |
133.6 |
6.2% |
178.4 |
74.9% |
Development Expenditure & Net Lending |
407.1 |
3.8 |
0.9% |
33.9 |
11.2% |
County Governments + Contingencies |
415.0 |
0.0 |
0.0% |
34.6 |
0.0% |
Total Expenditure |
4,433.6 |
229.2 |
5.2% |
369.5 |
62.0% |
Fiscal Deficit excluding Grants |
1,678.9 |
50.8 |
3.0% |
139.9 |
36.3% |
Total Borrowing |
1,668.1 |
67.3 |
4.0% |
139.0 |
48.4% |
Public Debt |
407.1 |
3.8 |
0.9% |
33.9 |
11.2% |
The Key take-outs from the release include;
The government missed its prorated revenue targets for the first month of the FY’2025/2026, achieving 77.7% of the prorated revenue targets in July 2025. The shortfall is largely due to the challenging business environment experienced in previous months with the Purchasing Managers’ Index (PMI), averaging 46.8 in July 2025, down from 48.6 in June 2025, marking the third consecutive month the index fell below the 50.0 neutral mark,. The low levels signaling worsening business conditions, mainly attributable to decreased output. However, the cost of credit has declined, providing some relief to businesses and households. While efforts to enhance revenue collection, such as broadening the tax base, curbing tax evasion, and suspending tax relief payments, are yet to yield full benefits, future revenue performance will depend on how quickly private sector activity gains momentum. This is expected to be supported by a stable Shilling, lower borrowing costs, and continued efforts to enhance economic growth. The reduction in the Central Bank Rate (CBR) by 25 basis points to 9.50% from 9.75%, following the Monetary Policy Committee’s (MPC) meeting on August 12th, 2025, is expected to further ease credit conditions and support private sector expansion.
Rates in the Fixed Income market have been on a downward trend due to high liquidity which has lowered the cost of borrowing. However, the government is 82.0% ahead of its prorated net domestic borrowing target of Kshs 83.8, having a net borrowing position of Kshs 152.5 bn (inclusive of T-bills). However, we expect a stabilization of the yield curve in the short and medium term, with the government looking to increase its external borrowing to maintain the fiscal surplus, hence alleviating pressure in the domestic market. As such, we expect the yield curve to stabilize in the short to medium-term and hence investors are expected to shift towards the long-term papers to lock in the high returns.
Market Performance
During the week, the equities market was on an upward trajectory, with NSE 20 gaining the most by 3.9%, while NSE 10, NSE 25 and NASI gained by 3.2%, 2.9% and 2.8% respectively, taking the YTD performance to gains of 32.2%, 29.7%, 24.3% and 23.9% for NASI, NSE 20, NSE 25 and NSE 10 respectively. The equities market performance was driven by gains recorded by large-cap stocks such as KCB, BAT and SCBK of 11.7%, 5.5% and 4.4% respectively. The performance was, however, weighed down by losses recorded by large cap stocks such as NCBA and EABL of 2.3% and 0.5% respectively.
During the week, equities turnover increased by 17.4% to USD 18.3 mn, from USD 15.6 mn recorded the previous week, taking the YTD total turnover to USD 556.9 mn. Foreign investors remained net buyers for the third consecutive week, with a net buying position of USD 2.5 mn, from a net buying position of USD 2.0 mn recorded the previous week, taking the YTD foreign net selling position to USD 24.4 mn, compared to a net selling position of USD 16.9 mn in 2024.
The market is currently trading at a price-to-earnings ratio (P/E) of 7.3x, 35.8% below the historical average of 11.4x. The year-to-date change in the price-to-earnings ratio (P/E) is 35.9% while the year-on-year change in the P/E ratio is 46.5%. The dividend yield stands at 6.0%, 1.3% points above the historical average of 4.7%. Key to note, NASI’s PEG ratio currently stands at 0.9x, an indication that the market is undervalued relative to its future growth. A PEG ratio greater than 1.0x indicates the market is overvalued while a PEG ratio less than 1.0x indicates that the market is undervalued. The charts below indicate the historical P/E and dividend yields of the market;
Universe of Coverage:
Cytonn Report: Equities Universe of Coverage |
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Company |
Price as at 08/08/2025 |
Price as at 15/08/2025 |
w/w change |
YTD Change |
Year Open 2025 |
Target Price* |
Dividend Yield |
Upside/ Downside** |
P/TBv Multiple |
Recommendation |
|
Diamond Trust Bank |
79.5 |
81.5 |
2.5% |
22.1% |
66.8 |
90.4 |
8.6% |
19.5% |
0.3x |
Accumulate |
|
Co-op Bank |
17.0 |
17.4 |
2.4% |
(0.6%) |
17.5 |
18.9 |
8.6% |
17.8% |
0.6x |
Accumulate |
|
Britam |
8.0 |
8.3 |
3.8% |
42.6% |
5.8 |
9.5 |
0.0% |
14.7% |
0.8x |
Accumulate |
|
Equity Group |
52.5 |
54.5 |
3.8% |
13.5% |
48.0 |
58.0 |
7.8% |
14.2% |
0.9x |
Accumulate |
|
ABSA Bank |
19.9 |
20.0 |
0.5% |
5.8% |
18.9 |
21.0 |
8.8% |
14.0% |
1.3x |
Accumulate |
|
Stanbic Holdings |
180.8 |
184.3 |
1.9% |
31.8% |
139.8 |
185.8 |
11.3% |
12.1% |
1.1x |
Accumulate |
|
I&M Group |
37.3 |
37.6 |
0.7% |
4.3% |
36.0 |
39.0 |
8.0% |
11.9% |
0.7x |
Accumulate |
|
Standard Chartered Bank |
321.0 |
335.3 |
4.4% |
17.5% |
285.3 |
328.8 |
13.4% |
11.5% |
1.9x |
Accumulate |
|
KCB Group |
48.4 |
54.0 |
11.7% |
27.4% |
42.4 |
53.7 |
5.6% |
5.0% |
0.7x |
Hold |
|
CIC Group |
3.4 |
4.0 |
16.1% |
85.5% |
2.1 |
4.0 |
3.3% |
4.8% |
1.1x |
Lighten |
|
NCBA |
66.3 |
64.8 |
(2.3%) |
27.0% |
51.0 |
60.2 |
8.5% |
1.4% |
1.0x |
Lighten |
|
Jubilee Holdings |
260.0 |
286.3 |
10.1% |
63.8% |
174.8 |
260.4 |
4.7% |
(4.3%) |
0.4x |
Sell |
|
*Target Price as per Cytonn Analyst estimates **Upside/ (Downside) is adjusted for Dividend Yield ***Dividend Yield is calculated using FY’2024 Dividends |
Weekly Highlights
During the week, KCB Group released their H1’2025 financial results. Below is a summary of the performance
Balance Sheet Items |
H1'2024 |
H1'2025 |
y/y change |
Government Securities |
313.4 |
305.1 |
(2.7%) |
Net Loans and Advances |
1,032.2 |
1,095.4 |
6.1% |
Total Assets |
1,976.9 |
1,969.0 |
(0.4%) |
Customer Deposits |
1,490.6 |
1,486.1 |
(0.3%) |
Deposits per branch |
2.6 |
3.3 |
10.5% |
Total Liabilities |
1,728.6 |
1,653.5 |
(4.3%) |
Shareholders’ Funds |
241.0 |
306.8 |
27.3% |
Balance Sheet Ratios |
H1'2024 |
H1'2025 |
% y/y change |
Loan to Deposit Ratio |
69.2% |
73.7% |
4.5% |
Government Securities to Deposit Ratio |
21.0% |
20.5% |
(0.5%) |
Return on average equity |
22.7% |
23.4% |
0.7% |
Return on average assets |
2.7% |
3.3% |
0.6% |
Income Statement (Kshs Bn) |
H1'2024 |
H1'2025 |
y/y change |
Net Interest Income |
61.3 |
69.1 |
12.7% |
Net non-Interest Income |
33.3 |
29.5 |
(11.3%) |
Total Operating income |
94.6 |
98.7 |
4.3% |
Loan Loss provision |
(12.2) |
(12.5) |
2.2% |
Total Operating expenses |
(56.5) |
(57.8) |
2.4% |
Profit before tax |
38.1 |
40.8 |
7.1% |
Profit after tax |
29.92 |
32.33 |
8.0% |
Core EPS |
18.2 |
19.6 |
8.0% |
Income Statement Ratios |
H1'2024 |
H1'2025 |
y/y change (% points) |
Yield from interest-earning assets |
11.4% |
12.5% |
1.1% |
Cost of funding |
4.6% |
4.5% |
(0.1%) |
Net Interest Spread |
6.8% |
8.0% |
1.1% |
Net Interest Margin |
7.1% |
8.4% |
1.3% |
Cost of Risk |
12.9% |
12.6% |
(0.3%) |
Net Interest Income as % of operating income |
64.8% |
70.1% |
5.3% |
Non-Funded Income as a % of operating income |
35.2% |
29.9% |
(5.3%) |
Cost to Income Ratio |
59.7% |
58.6% |
(1.1%) |
Cost to Income Ratio (without LLP) |
46.8% |
46.0% |
(0.8%) |
Capital Adequacy Ratios |
H1'2024 |
H1'2025 |
% points change |
Core Capital/Total Liabilities |
15.8% |
18.7% |
2.9% |
Minimum Statutory ratio |
8.0% |
8.0% |
0.0% |
Excess |
7.8% |
10.7% |
2.9% |
Core Capital/Total Risk Weighted Assets |
17.8% |
17.0% |
(0.8%) |
Minimum Statutory ratio |
10.5% |
10.5% |
0.0% |
Excess |
7.3% |
6.5% |
(0.8%) |
Total Capital/Total Risk Weighted Assets |
20.3% |
19.7% |
(0.6%) |
Minimum Statutory ratio |
14.5% |
14.5% |
0.0% |
Excess |
5.8% |
5.2% |
(0.6%) |
Liquidity Ratio |
47.0% |
47.6% |
0.6% |
Minimum Statutory ratio |
20.0% |
20.0% |
0.0% |
Excess |
27.0% |
27.6% |
0.6% |
For a more detailed analysis, please see KCB Group’s H1’2025 Earnings Note
During the week, Co-operative Bank released their H1’2025 financial results. Below is a summary of the performance
Balance Sheet Items |
H1'2024 |
H1'2025 |
y/y change |
Government Securities |
202.2 |
253.7 |
25.5% |
Net Loans and Advances |
375.6 |
391.3 |
4.2% |
Total Assets |
716.9 |
811.9 |
13.2% |
Customer Deposits |
507.4 |
547.7 |
7.9% |
Deposits per branch |
2.7 |
2.7 |
(0.5%) |
Total Liabilities |
589.8 |
655.6 |
11.2% |
Shareholders Funds |
126.7 |
156.3 |
23.4% |
Balance Sheet Ratios |
H1'2024 |
H1'2025 |
y/y change |
Loan to Deposit Ratio |
74.0% |
71.4% |
(2.6%) |
Government Securities to Deposits Ratio |
39.9% |
46.3% |
6.5% |
Return on average equity |
20.5% |
18.8% |
(1.7%) |
Return on average assets |
3.5% |
3.5% |
(0.0%) |
Income Statement |
H1'2024 |
H1'2025 |
y/y change |
Net Interest Income |
23.9 |
29.4 |
23.1% |
Non-Interest Income |
15.4 |
14.1 |
(8.2%) |
Total Operating income |
39.2 |
43.5 |
10.8% |
Loan Loss provision |
(3.0) |
(4.5) |
50.5% |
Total Operating expenses |
(21.3) |
(24.0) |
13.0% |
Profit before tax |
18.2 |
19.7 |
8.3% |
Profit after tax |
13.0 |
14.1 |
8.4% |
Core EPS |
2.2 |
2.4 |
8.4% |
Income Statement Ratios |
H1'2024 |
H1'2025 |
Y/Y Change (% points) |
Yield from interest-earning assets |
12.7% |
13.7% |
1.1% |
Cost of funding |
5.4% |
5.7% |
0.4% |
Net Interest Spread |
7.3% |
8.0% |
0.7% |
Net Interest Income as % of operating income |
60.8% |
67.5% |
6.7% |
Non-Funded Income as a % of operating income |
39.2% |
32.5% |
(6.7%) |
Cost to Income |
54.2% |
55.3% |
1.1% |
CIR without provisions |
46.6% |
44.9% |
(1.7%) |
Cost to Assets |
2.5% |
2.4% |
(0.1%) |
Net Interest Margin |
7.8% |
8.6% |
0.8% |
Capital Adequacy Ratios |
H1'2024 |
H1'2025 |
% points change |
Core Capital/Total deposit Liabilities |
23.1% |
23.1% |
0.0% |
Minimum Statutory ratio |
8.0% |
8.0% |
|
Excess |
15.1% |
15.1% |
0.0% |
Core Capital/Total Risk Weighted Assets |
18.1% |
18.8% |
0.7% |
Minimum Statutory ratio |
10.5% |
10.5% |
|
Excess |
7.6% |
8.3% |
0.7% |
Total Capital/Total Risk Weighted Assets |
21.3% |
21.3% |
0.0% |
Minimum Statutory ratio |
14.5% |
14.5% |
|
Excess |
6.8% |
6.8% |
0.0% |
Liquidity Ratio |
54.0% |
66.7% |
12.7% |
Minimum Statutory ratio |
20.0% |
20.0% |
|
Excess |
34.0% |
46.7% |
12.7% |
For a more detailed analysis, please see the Co-operative Bank’s H1’2025 Earnings Note
During the week, Absa Bank Kenya released their H1’2025 financial results. Below is a summary of the performance
Balance Sheet Items |
H1’2024 (Kshs bn) |
H1’2025 (Kshs bn) |
y/y change |
Government Securities |
95.3 |
162.4 |
70.3% |
Net Loans and Advances |
316.4 |
304.9 |
(3.6%) |
Total Assets |
481.4 |
531.6 |
10.4% |
Customer Deposits |
353.3 |
361.3 |
2.3% |
Deposit per Branch |
4.6 |
4.2 |
(10.7%) |
Total Liabilities |
408.4 |
442.6 |
8.4% |
Shareholder's Funds |
73.0 |
89.0 |
21.9% |
Balance Sheet Ratios |
H1’2024 |
H1’2025 |
% points change |
Loan to Deposit Ratio |
89.5% |
84.4% |
(5.1%) |
Govt Securities to Deposit ratio |
27.0% |
44.9% |
18.0% |
Return on average equity |
27.5% |
27.0% |
(0.5%) |
Return on average assets |
3.8% |
4.3% |
0.5% |
Income Statement |
H1’2024 (Kshs bn) |
H1’2025 (Kshs bn) |
y/y change |
Net Interest Income |
23.0 |
22.3 |
(2.9%) |
Net non-Interest Income |
8.8 |
9.1 |
3.3% |
Total Operating income |
31.8 |
31.5 |
(1.2%) |
Loan Loss provision |
(5.2) |
(3.2) |
(37.9%) |
Total Operating expenses |
(16.6) |
(14.7) |
(11.5%) |
Profit before tax |
15.3 |
16.8 |
10.0% |
Profit after tax |
10.7 |
11.7 |
9.1% |
Core EPS (Kshs) |
2.0 |
2.2 |
9.1% |
Dividend Per Share (Kshs) |
0.20 |
0.20 |
0.0% |
Dividend Yield (Annualized) |
12.5% |
9.8% |
(22.1%) |
Dividend Payout Ratio |
10.1% |
9.3% |
(8.3%) |
Income Statement Ratios |
H1’2024 |
H1’2025 |
% points change |
Yield from interest-earning assets |
14.1% |
13.4% |
(0.7%) |
Cost of funding |
4.8% |
4.1% |
(0.8%) |
Net Interest Spread |
2.5% |
1.8% |
(0.6%) |
Net Interest Margin |
10.0% |
9.8% |
(0.2%) |
Cost of Risk |
16.2% |
10.2% |
(6.0%) |
Net Interest Income as % of operating income |
72.3% |
71.0% |
(1.3%) |
Non-Funded Income as a % of operating income |
27.7% |
29.0% |
1.3% |
Cost to Income |
52.0% |
46.6% |
(5.4%) |
Cost to Income (Without LLPs) |
35.8% |
36.4% |
0.6% |
Capital Adequacy Ratios |
H1’2024 |
H1’2025 |
% points change |
Core Capital/Total Liabilities |
18.3% |
21.4% |
3.1% |
Minimum Statutory ratio |
8.0% |
8.0% |
0.0% |
Excess |
10.3% |
13.4% |
3.1% |
Core Capital/Total Risk Weighted Assets |
14.8% |
17.6% |
2.8% |
Minimum Statutory ratio |
10.5% |
10.5% |
0.0% |
Excess |
4.3% |
7.1% |
2.8% |
Total Capital/Total Risk Weighted Assets |
18.6% |
20.5% |
1.9% |
Minimum Statutory ratio |
14.5% |
14.5% |
0.0% |
Excess |
4.1% |
6.0% |
1.9% |
Liquidity Ratio |
35.2% |
45.5% |
10.3% |
Minimum Statutory ratio |
20.0% |
20.0% |
0.0% |
Excess |
15.2% |
25.5% |
10.3% |
For a more detailed analysis, please see the Absa Bank Kenya H1’2025 Earnings Note
During the week, Equity Group released their H1’2025 financial results. Below is a summary of the performance
Balance Sheet Items |
H1'2024 |
H1'2025 |
y/y change |
Government Securities |
264.3 |
321.2 |
21.6% |
Net Loans and Advances |
791.1 |
825.1 |
4.3% |
Total Assets |
1,746.0 |
1,798.9 |
3.0% |
Customer Deposits |
1299.5 |
1319.9 |
1.6% |
Deposits/Branch |
3.7 |
3.3 |
(11.4%) |
Total Liabilities |
1525.5 |
1522.9 |
(0.2%) |
Shareholders’ Funds |
211.1 |
261.9 |
24.1% |
Balance Sheet Ratios |
H1'2024 |
H1'2025 |
% y/y change |
Loan to Deposit Ratio |
60.9% |
62.5% |
1.6% |
Government Securities to Deposit Ratio |
33.4% |
38.9% |
5.5% |
Return on average equity |
23.7% |
22.8% |
(0.9%) |
Return on average assets |
2.8% |
3.0% |
0.3% |
Income Statement (Kshs Bn) |
H1'2024 |
H1'2025 |
y/y change |
Net Interest Income |
54.4 |
59.3 |
9.1% |
Net non-Interest Income |
42.8 |
40.9 |
(4.4%) |
Total Operating income |
97.1 |
100.2 |
3.2% |
Loan Loss provision |
(10.5) |
(6.9) |
(34.5%) |
Total Operating expenses |
(60.0) |
(58.7) |
(2.2%) |
Profit before tax |
37.2 |
41.5 |
11.8% |
Profit after tax |
29.6 |
34.6 |
16.9% |
Core EPS |
7.6 |
8.8 |
16.8% |
Income Statement Ratios |
H1'2024 |
H1'2025 |
y/y change |
Yield from interest-earning assets |
11.8% |
11.1% |
(0.6%) |
Cost of funding |
4.2% |
3.9% |
(0.3%) |
Cost of risk |
10.8% |
6.9% |
(4.0%) |
Net Interest Margin |
7.8% |
7.5% |
(0.3%) |
Net Interest Income as % of operating income |
56.0% |
59.2% |
3.2% |
Non-Funded Income as a % of operating income |
44.0% |
40.8% |
(3.2%) |
Cost to Income Ratio |
61.7% |
58.5% |
(3.2%) |
CIR without LLP |
50.9% |
51.7% |
0.8% |
Cost to Assets |
2.9% |
2.9% |
0.0% |
Capital Adequacy Ratios |
H1'2024 |
H1'2025 |
% points change |
Core Capital/Total Liabilities |
17.4% |
18.9% |
1.5% |
Minimum Statutory ratio |
8.0% |
8.0% |
0.0% |
Excess |
9.4% |
10.9% |
1.5% |
Core Capital/Total Risk Weighted Assets |
15.8% |
16.5% |
0.7% |
Minimum Statutory ratio |
10.5% |
10.5% |
0.0% |
Excess |
5.3% |
6.0% |
0.7% |
Total Capital/Total Risk Weighted Assets |
18.4% |
18.1% |
(0.3%) |
Minimum Statutory ratio |
14.5% |
14.5% |
0.0% |
Excess |
3.9% |
3.6% |
(0.3%) |
Liquidity Ratio |
56.7% |
58.6% |
1.9% |
Minimum Statutory ratio |
20.0% |
20.0% |
0.0% |
Excess |
36.7% |
38.6% |
1.9% |
For a more detailed analysis, please see the Equity Group Kenya H1’2025 Earnings Note
Asset Quality:
The table below shows the asset quality of listed banks that have released their H1’2025 results using several metrics:
Cytonn Report: Listed Banks Asset Quality in H1’2025 |
||||||
|
H1'2025 NPL Ratio* |
H1'2024 NPL Ratio** |
% point change in NPL Ratio |
H1'2025 NPL Coverage* |
H1'2024 NPL Coverage** |
% point change in NPL Coverage |
Stanbic Holdings |
9.5% |
8.9% |
0.6% |
82.7% |
75.0% |
7.7% |
Cooperative Bank |
17.3% |
16.7% |
0.6% |
65.8% |
67.7% |
(1.9%) |
KCB Group |
17.9% |
18.1% |
(0.2%) |
64.3% |
59.5% |
4.8% |
Absa Bank Kenya |
13.2% |
11.5% |
1.7% |
66.6% |
62.3% |
4.3% |
Equity Group |
15.3% |
13.9% |
1.4% |
62.4% |
58.8% |
3.6% |
H1’2025 Mkt Weighted Average* |
15.3% |
13.4% |
1.9% |
66.3% |
62.7% |
3.6% |
H1’2024 Mkt Weighted Average** |
12.7% |
13.4% |
0.6% |
60.1% |
57.5% |
(2.6%) |
*Market cap weighted as at 15/08/2025 |
||||||
**Market cap weighted as at 24/08/2024 |
Key take-outs from the table include;
Summary Performance
The table below shows the performance of listed banks that have released their H1’2025 results using several metrics:
Cytonn Report: Listed Banks Performance in H1’2025 |
||||||||||||||
Bank |
Core EPS Growth |
Interest Income Growth |
Interest Expense Growth |
Net Interest Income Growth |
Net Interest Margin |
Non-Funded Income Growth |
NFI to Total Operating Income |
Growth in Total Fees & Commissions |
Deposit Growth |
Growth in Government Securities |
Loan to Deposit Ratio |
Loan Growth |
Return on Average Equity |
|
Equity Group |
16.8% |
(0.6%) |
(18.0%) |
9.1% |
7.5% |
(4.4%) |
40.8% |
3.1% |
1.6% |
21.6% |
62.5% |
4.3% |
22.8% |
|
Absa Bank Kenya |
9.1% |
(8.3%) |
(21.3%) |
(2.9%) |
9.8% |
3.3% |
29.0% |
13.8% |
2.3% |
70.3% |
84.4% |
(3.6%) |
27.0% |
|
Co-operative Bank |
8.4% |
12.6% |
(3.3%) |
23.1% |
8.6% |
(8.2%) |
32.5% |
(3.4%) |
7.9% |
25.5% |
71.4% |
4.2% |
18.8% |
|
KCB Group |
8.0% |
3.2% |
(13.1%) |
12.7% |
8.4% |
(11.3%) |
29.9% |
1.8% |
(0.3%) |
(2.7%) |
73.7% |
6.1% |
23.4% |
|
Stanbic Group |
(9.3%) |
(10.5%) |
(35.3%) |
(5.8%) |
5.4% |
0.8% |
39.2% |
12.7% |
(2.5%) |
47.1% |
67.2% |
(2.2%) |
18.2% |
|
H1'2025 Mkt Weighted Average* |
9.1% |
0.1% |
(16.9%) |
8.6% |
8.0% |
(5.0%) |
34.6% |
4.6% |
1.7% |
26.6% |
70.9% |
2.7% |
22.5% |
|
H1’2024 Mkt Weighted Average** |
28.9% |
29.7% |
58.6% |
17.6% |
7.2% |
13.6% |
38.0% |
10.8% |
16.1% |
(9.3%) |
66.5% |
0.4% |
22.7% |
|
*Market cap weighted as at 15/08/2025 |
||||||||||||||
**Market cap weighted as at 24/08/2024 |
Key take-outs from the table include:
We are “Bullish” on the Equities markets in the short term due to current cheap valuations, lower yields on short-term government papers and expected global and local economic recovery, and, “Neutral” in the long term due to persistent foreign investor outflows. With the market currently trading at a discount to its future growth (PEG Ratio at 0.9x), we believe that investors should reposition towards value stocks with strong earnings growth and that are trading at discounts to their intrinsic value. We expect the current high foreign investors sell-offs to continue weighing down the economic outlook in the short term.
During the week, the European Investment Bank (EIB) has made an equity investment in local developer, International Housing Solutions (IHS) Kenya, to help it deliver more than 3,000 affordable housing units in prime neighborhoods such as Nairobi and Kiambu. The bank’s development arm, EIB Global, has committed Kshs 3.2 bn in IHS Kenya Green Housing Fund for the construction and acquisition of energy-efficient and affordable housing in Kenya. The IHS Kenya Green Housing Fund invests in the development and acquisition of green-certified, affordable properties in Kenya, with a focus on low- and moderate-income segments of the population.
The European Investment Bank is the long-term lending institution of the European Union, owned by its member states. It finances investments that contribute to European Union policy objectives. The EIB supports affordable housing by offering flexible financing, including direct loans to social and affordable housing providers, as well as more commonly by working with special purpose financial intermediaries such as equity funds. The goal is to improve social cohesion and the quality of life of vulnerable groups whose housing needs are not met by the market.
This partnership between the European Investment Bank and International Housing Solutions Kenya, will have immense benefits on the residential sector in Kenya among them , (i) Accelerated construction of affordable housing units. With the financial backing from EIB, IHS Kenya is currently supporting development of energy-efficient housing across projects in Nairobi. This will enable them to deliver more than 3,000 affordable housing units in prime areas such as Nairobi and Kiambu, (ii) Enhanced access to capital and financing. EIB’s backing makes capital available for these affordable housing projects, bridging a key funding gap and drawing co-investors, (iii) Stimulating broader economic growth. By boosting affordable housing construction, EIB initiatives catalyze job creation across construction, materials, and related industries, hence multiplying economic and social benefits across communities.
The EIB-backed affordable housing initiatives mark a significant boost for Kenya’s residential sector. By delivering thousands of quality, energy-efficient homes, lowering living costs for residents, and stimulating local job creation, the projects promise not only to expand access to decent housing but also to set new benchmarks in green construction.
During the week, International hotel chain, Mariott International is set to debut its luxury The Ritz-Carlton brand in Africa with an exclusive luxury tented safari lodge in the Maasai Mara. It is set to officially open on August 15th in a ceremony to be presided by Narok County Governor, Patrick Ole Ntuntu. The camp will host 20 tented suites, 2 bridges, a restaurant and other facilities on a 49.4-acre piece of land sitting on the banks of the Sand River. Each suite will also include a personalised butler service, and the camp has been designed as an eco-friendly ecosystem utilising solar power, rainwater harvesting, and waste reduction.
The Maasai Mara is one of Kenya’s most prominent tourist attractions. Its attractions are often defined by the annual Great Migration, one of the Seven Natural Wonders of the World, a clockwise migration of more than a million wildebeest from the Serengeti, into the Maasai Mara and back. With a presence in 30 countries, The Ritz-Carlton has become synonymous with luxury and exclusivity, appealing to high-net worth travelers seeking a bespoke experience in its hotels and resorts.
The Ritz-Carlton lodge will have immense positive impact on the hospitality sector in Kenya, (i) Elevating Kenya’s luxury positioning. As the first Ritz-Carlton property in Africa, this high-end safari camp gives Kenya a powerful signal of its serving capability in the luxury travel segment, with 20 exclusive tented suites offering ultra-luxury experiences starting from USD 3,500 per person per night, (ii) Promoting sustainable tourism. The camp employs eco-friendly design and has obtained full regulatory approval, including Environmental Impact Assessment and zoning compliance, underscoring a commitment to conservation-sensitive development, (iii) Job creation and community engagement. The project is delivering local employment opportunities, promoting cultural tourism, and implementing social responsibility programs, all reinforcing community empowerment.
The debut of The Ritz-Carlton Maasai Mara is set to elevate Kenya’s hospitality sector by cementing its status as a premier luxury safari destination, attracting high-spend visitors, and boosting tourism revenue for both local communities and the national economy. With its focus on premium experiences, eco-friendly design, and community engagement, the project promises to raise service standards and enhance Kenya’s global tourism appeal.
During the week, the International Finance Corporation (IFC) is proposing to make an equity investment of Kshs 1.3 bn in Safari holdings, the parent firm of ARP Africa Travel, Pollman’s Tours and Safaris and Tanzanian tour company, Ranger Safaris. The IFC has disclosed a proposed equity co-investment of up to Kshs 1.3 bn in Safari Holdings. The co-investment will be made through a Mauritius investment vehicle alongside the Alterra Africa Accelerator Fund.
ARP Africa Travel, Pollman’s and Ranger Safaris, while integrated at group level, operate as independent subsidiaries of Safari Holdings. UK-headquartered ARP Africa Travel handles business to business tour package sales to Kenya for Pollman’s and to Tanzania for Ranger Safaris, which then deliver on the packages sold by ARP through services such as guided tours and safaris, ticketing, hotel reservations and related transport services.
This will immensely benefit the hospitality sector in Kenya as it will: (i) Boost Capital for tour operators and safari providers. This injection of growth capital can be used to improve infrastructure, expand operations and adopt more advanced technologies to streamline logistics and bookings. Such investments contribute directly to raising the quality and reliability of Kenya’s tourism services, (ii) support for sustainable tourism. With development funds like this, Safari Holdings may invest in sustainable and responsible tourism practices such as wildlife conservation, eco-friendly transport, and community-based tourism programs, which in turn enhance Kenya’s reputation as a sustainable travel destination, (iii) regional growth with local benefits. Though the investment covers both Kenya and Tanzania, Kenya stands to gain significantly thanks to Safari Holdings’ established presence. It can also catalyze growth in surrounding hospitality ecosystems such as lodges, cultural tours, and local markets.
By strengthening the capacity of a leading safari and tour operator, the funding is poised to enhance service quality, promote sustainable tourism, and generate broad economic benefits through job creation and increased visitor spending. This move not only accelerates the sector’s post-pandemic recovery but also reinforces Kenya’s standing as a premier African travel destination, capable of attracting both high-value tourists and further investment.
During the week, Kenya has invited international development lenders to finance a Kshs 259.0 bn expansion of the Jomo Kenyatta International Airport located in Nairobi. This comes nine months after it cancelled a deal with India’s Adani Group after its founder, Gautam Adani, was indicted in the United States of America. Due to its soaring debt levels, Kenya is seeking new ways to finance infrastructure projects. For instance, Kenya will issue a securitized bond for Kshs 175.0 bn locally and abroad next month for road construction.
According to the Cabinet Secretary of Transport, Davis Chirchir, the government has notified development agencies to inform them of the opportunity to build the airport. Some of the agencies include, the European Investment Bank, African Development Bank, the Japan International Cooperation Agency, Exim Bank and KFW Development Bank. The airport expansion will include a second runway at the airport and a new terminal building.
This expansion will bring immense benefits to the infrastructure sector in Kenya and: (i) ensure the government maintains control over key national assets. The government’s decision to directly build the second runway and new terminal before potentially leasing the facility later keeps strategic infrastructure under national stewardship. This helps safeguard public interest and fosters accountable management, (ii) catalyze broader infrastructure development. Expanding JKIA not only upgrades aviation infrastructure but also stimulates investment in complementary sectors such as roads, logistics, and related construction, which amplifies the benefits across the infrastructure ecosystem, (iii) Alignment with National Development Goals. Airport modernization is an initiative under Kenya Vision 2030, already contributing significantly to the national economy. This revamped, locally managed model accelerates progress toward broader infrastructure targets.
Kenya’s decision to finance the JKIA expansion through development banks and domestic bonds marks a strategic win for the country’s infrastructure sector. This approach not only safeguards national control over a critical asset but also ensures transparent, sustainable funding while stimulating related developments in transport, logistics, and construction.
On the Unquoted Securities Platform, Acorn D-REIT and I-REIT traded at Kshs 26.7 and Kshs 22.9 per unit, respectively, as per the last updated data on 15th August 2025. The performance represented a 33.4% and 14.5% gain for the D-REIT and I-REIT, respectively, from the Kshs 20.0 inception price. The volumes traded for the D-REIT and I-REIT came in at Kshs 12.8 mn and Kshs 39.2 mn shares, respectively, with a turnover of Kshs 323.5 mn and Kshs 791.5 mn, respectively, since inception in February 2021. Additionally, ILAM Fahari I-REIT traded at Kshs 11.0 per share as of 15th August 2025, representing a 45.0% loss from the Kshs 20.0 inception price. The volume traded to date came in at 1.2 mn shares for the I-REIT, with a turnover of Kshs 1.5 mn since inception in November 2015.
REITs offer various benefits, such as tax exemptions, diversified portfolios, and stable long-term profits. However, the ongoing decline in the performance of Kenyan REITs and the restructuring of their business portfolios are hindering significant previous investments. Additional general challenges include:
We expect Kenya’s Real Estate sector to remain resilient, supported by: i) increased residential funding from European Investment Bank through their equity investment of Kshs 3.2 bn in International Housing Solutions Kenya which will aid in construction and acquisition of energy-efficient and affordable housing in Kenya, ii) Improved hospitality sector, with Mariott International set to debut its luxury Ritz Carlton brand in Africa with an exclusive luxury tented safari lodge in the Maasai Mara. This will help in elevating Kenya’s position as top tourist destination, (iii) Improved infrastructure sector, as Kenya is seeking for international development lenders such as Japan International Cooperation Agency to facilitate the Kshs 259.0 bn expansion of the Jomo Kenyatta International Airport in Nairobi. However, challenges including high financing and execution risks in residential projects and dependence on external borrowing for infrastructure.
Disclaimer: The views expressed in this publication are those of the writers where particulars are not warranted. This publication, which is in compliance with Section 2 of the Capital Markets Authority Act Cap 485A, is meant for general information only and is not a warranty, representation, advice, or solicitation of any nature. Readers are advised in all circumstances to seek the advice of a registered investment advisor.
Insolvency refers to a financial situation where an individual, business or entity, such as a fund, is unable to meet their financial obligations or settle their debts as they become due. In most cases, the state of insolvency occurs due to an increase in business expenses, poor cash management, law suits, poor budgeting, fraud, business expansion, or a reduction in sales. In Kenya, insolvency proceedings are primarily governed by the Insolvency Act of 2015. The act provides for how insolvent companies can be assisted to service creditors’ obligations and protect the interests of all stakeholders. The options available for such an insolvent company include Administration, Receivership, voluntary arrangements, and liquidation.
Earlier this year, we released a report focused on the Insolvency Act of 2015, financial health of a company and warning signs, business restructuring options under the insolvency act, various case studies including Mastermind Tobacco, Mobius Kenya and Kaluworks, Challenges affecting insolvency practice. We also offered various recommendations and conclusions. For more information, please visit our Restructuring and Insolvency in Kenya and Cytonn weekly #3/2025
Previously, we covered the following topics on insolvency:
Following an increase in the number of insolvency cases being witnessed in the Real Estate sector in Kenya, this week we focus on Real Estate Insolvency in Kenya report to provide a comprehensive overview of insolvency as it relates to the industry and its major causes
The note will include:
Insolvency in the Kenyan real estate arises when a developer, property company, or project vehicle can no longer meet its financial obligations as they fall due, triggering procedures such as administration, receivership, or liquidation under the Insolvency Act, 2015. The sector’s capital-intensive nature means that even minor disruptions in cash flow can escalate quickly. Common triggers include excessive debt reliance, cost overruns from inflation or mismanagement, and delayed or failed off-plan sales that deprive projects of critical liquidity. Market oversupply can slow absorption rates, while legal disputes over land or planning approvals can stall construction and revenue. Broader economic pressures such as high interest rates, currency volatility, and tightened mortgage lending further strain developers. These dynamics have made insolvency more visible in recent years, with several notable cases in 2025 reflecting a combination of financing challenges, operational weaknesses, and adverse market conditions.
The real estate sector is a key pillar of Kenya’s economy. It accounted for 15.5% of GDP (including construction) in Q1’2025 and is expected to continue growing supported by the high urbanization and population growth rates of 3.7% p.a and 2.0% p.a, respectively, against the global averages of 1.7% p.a and 1.0% p.a, respectively, as at 2024. Nairobi’s population is projected to reach over 7.0 mn by 2030, sustaining high housing demand. Yet Kenya faces a severe housing deficit (estimated at 2.0 mn units, growing by 250,000 annually).
Individual insolvency (bankruptcy) in Kenya applies when a natural person (or sole proprietor) cannot pay personal debts. Under the Insolvency Act Part III, either the individual or a creditor may petition for bankruptcy. In a real estate context, individual insolvency might involve selling a bankrupt person’s home or land. However, Kenya’s law provides that if a bankrupt individual remains in possession of land (e.g. family home) for three years without trustee action, that land vests in the individual upon discharge. In practice, an individual risk losing investment property or development land to satisfy creditors. After three years, an individual is normally discharged from bankruptcy and freed from most debts.
Corporate insolvency deals with companies and legal entities owning property (developers, real estate firms, hotels, etc.). The Insolvency Act provides several procedures:
Real estate insolvency typically results from a combination of economic, managerial, and market factors:
Kenya’s macroeconomy heavily influences real estate viability. High interest rates raise mortgage and construction loan costs and inflation drives up building material prices. Additionally, external shocks like the COVID-19 downturn, elections slowdown, or a banking crisis, can dry up demand for Real Estate properties, leading to rent defaults and unsold stock. Lenders continue to tighten their lending requirements and demand more collateral from developers as a result of elevated credit risk in the Real Estate sector as evidenced by the 16.6% increase in gross Non-Performing Loans (NPLs) to Kshs 118.6 bn in Q4’2024, from Kshs 101.7 bn recorded during Q4’2023. Although inflation has slightly eased to 4.1% as of July 2025, construction costs remain high, averaging Kshs 73,400 per SQM in 2025, up from Kshs 71,200 in 2024 representing a 3.1% increase. Prices of key inputs such as cement, steel, glass, and fittings, remain elevated due to import costs and VAT policies, which continue to impede development activity and temper land absorption rates. Failure to pay-back the lender’s money, their financing is rendered defaulted and the banks goes to the bank to exercise their secured rights. Mitini Scapes Development limited, went under administration after defaulting Kshs 79.0Mn debt to I&M bank and other obligations to Cooperative bank and NCBA
High mortgage interest rates currently at 14.3% and high transaction costs, have made it difficult for low- and middle-income earners to afford mortgages. Nonetheless, we foresee that heightened cooperation among industry stakeholders and the Kenya Mortgage Refinance Company (KMRC) will help alleviate this challenge. Particularly noteworthy are the government's initiatives aimed at enhancing accessibility to affordable home loans for Kenyans, offering reduced interest rates starting from 9.5%. These measures are poised to enhance the effectiveness of mortgage lending by enhancing accessibility to home loans, thereby stimulating higher adoption rates across the nation.
Mismanagement is a frequent cause. Developers or landlords may overextend themselves by initiating projects without adequate capital or pre-sales, relying excessively on debt. Without escrow safeguards, some projects absorb buyers’ deposits into general funds, leaving nothing to complete construction. Governance failures such as lack of experience, corruption, or fraud, also contribute. Many Kenyan corporate insolvency cases have cited “mismanagement” and reckless expansion as root causes. In real estate specifically, delays in project timelines, cost overruns from poor budgeting, and even “white elephant” projects lacking market demand can bankrupt developers. In sum, weak governance and inadequate financial controls often precipitate insolvency when cash flows falter. For instance, Kings Pride properties limited faced liquidation after the buyers filled a petition after paying deposits for their properties and they never received any Sales agreements or the apartments they had paid for. Same case happened to Banda homes where investors paid for their apartments and the developer did not deliver them as promised
Shifting demand patterns can render real estate assets unprofitable. For example, the rise of remote work globally has weakened demand for traditional office space. Nairobi saw prime office rents fall by 0.3% to Kshs 119 in 2024 from Kshs 119.4 in 2023 per square foot and vacancies rise by 0.4% points to 19.3% in 2024 from 19.7% in 2023. Similarly, e-commerce growth favors warehouses over retail malls. Kenya has also seen a surge in speculative developments; an oversupply of commercial office spaces in Nairobi Metropolitan Area of about 15,000 SQM in H1’2025, means many sits empty or rent at a loss. Other trends include population movement such as urban migration increasing housing demand, rural decline hitting local developments and regulatory changes such as new tax laws or building regulations, that can suddenly affect project viability.
Also, Certain segments, especially high-end apartments, experienced oversupply. Developers racing to build in affluent neighborhoods ended up with slow absorption, weak yields, and difficulty offloading units. This deepening supply-demand mismatch has made it increasingly hard for project revenues to keep up with financing obligations leading to insolvency petitions
Few public cases focus solely on real estate companies, but relevant examples illustrate typical dynamics:
Below are all the real estate related insolvencies in Kenya
Cytonn Report: insolvent Real Estate Firms |
||||||
No. |
Company |
Year declared Insolvent |
Debt Owed (in Bn) |
Amount Paid |
Industry |
Insolvency practitioner |
1 |
English Point Marina |
2022 |
5.2 |
-** |
Real Estate |
Kamal Anatroy Bhatt |
2 |
Cytonn High Yield Solutions/Cytonn Real Estate Project Notes |
2023 |
14.2 |
-** |
Real Estate |
The Official Receiver |
3 |
The Lynx at Ngong Road Limited |
2025 |
-** |
-** |
Real Estate |
Kamal Anatroy Bhatt |
4 |
Mitini Scapes Development Limited |
2025 |
0.325 |
-** |
Real Estate |
Swaroop Rao Ponangipalli and P.V Rao |
5 |
Banda Homes Limited |
2025 |
0.024 |
-** |
Real Estate |
Official Receiver |
6 |
Runda Royal Limited |
2025 |
-** |
-** |
Real Estate |
KVSK Sastry |
7 |
Kings pride properties Limited (subsidiary of telegan) |
2025 |
0.021 |
-** |
Real Estate |
Official Receiver |
8 |
Telegan Investments Limited |
2025 |
0.415 |
-** |
Real Estate |
|
9 |
Chiedo Developers Limited |
2024 |
-** |
-** |
Real Estate |
Christopher Kirathe of Ernst and Young LLP |
Source:Cytonn research
Insolvency in Kenya’s real estate sector is governed by a modern legal regime (Insolvency Act 2015) that emphasizes rehabilitation but still faces practical hurdles. Looking ahead, Kenya’s insolvency landscape is likely to see more restructuring and rescue attempts. As economic pressures (e.g. high NPLs, rising costs) continue, more real estate companies may seek administration or CVAs instead of liquidation. In the long term, a robust insolvency framework can lend confidence to Kenya’s real estate market by ensuring that failures are managed transparently and losses are limited.
Disclaimer: The views expressed in this publication are those of the writers where particulars are not warranted. This publication, which is in compliance with Section 2 of the Capital Markets Authority Act Cap 485A, is meant for general information only and is not a warranty, representation, advice or solicitation of any nature. Readers are advised in all circumstances to seek the advice of a registered investment advisor