Kenya Banking Sector Profits Rose 17.7% in 2025, CBK Report Shows
By Faith Jepkirui | October 1, 2026
Kenya’s banking sector recorded stronger profitability in 2025, with profit before tax rising by 17.7% to KSh306.3 billion, according to the Central Bank of Kenya’s newly released 2025 Bank Supervision Annual Report.
Profit Rose by KSh46 Billion
CBK says sector profit before tax increased from KSh260.3 billion in December 2024 to KSh306.3 billion in December 2025 — an increase of KSh46 billion.
The regulator attributed the improvement mainly to expenses falling faster than total income.
Loans Also Expanded
Gross loans increased by 6.8% during the year to about KSh4.35 trillion, reflecting increased demand for credit across economic sectors.
Bad Loans Remained High
The stock of non-performing loans declined only slightly, from KSh697.3 billion to KSh696.9 billion. That means asset quality remained a major issue even as profitability improved.
Liquidity Improved
The average liquidity ratio increased from 56.0% to 59.3%, which CBK linked to liquid assets growing faster than short-term liabilities.
What the Numbers Mean for Customers
Higher sector profits do not automatically translate into cheaper loans or higher deposit rates. Pricing still depends on bank funding costs, credit risk, competition and monetary policy.
For borrowers, the large stock of non-performing loans remains important because banks often factor credit risk into lending decisions and pricing.
Profitability Improved Even as Credit Risk Stayed Elevated
The combination of higher profit and a still-large non-performing-loan stock is important. It shows that sector profitability can improve even while many borrowers continue to struggle with repayment. Banks can earn more through interest income, fees, investments and cost control while simultaneously carrying significant credit risk.
What the Liquidity Ratio Tells Us
A higher liquidity ratio means banks, on average, held a larger cushion of liquid assets relative to short-term obligations. That supports the sector’s ability to meet customer withdrawals and other near-term commitments, although individual banks can differ significantly from the sector average.
What Borrowers and Depositors Should Watch
For borrowers, sector profitability does not automatically mean loan rates will fall. Lending prices are influenced by monetary policy, funding costs, borrower risk and competition. Depositors should likewise compare products rather than assume that stronger bank profits will translate directly into higher savings rates.
CBK’s annual supervision report is useful because it allows customers and investors to look beyond headline profits and examine loan growth, bad debts, capital and liquidity together.
