Top Kenyan Banks Reaps Big From Treasury Bonds

Kenya’s leading banks earned a combined Sh58 billion from investments in government securities in 2024, underlining a growing reliance on the safety and profitability of Treasury bonds.

The latest financial reports show Equity Bank emerged as the top earner, making Sh15.8 billion from its bond portfolio, followed closely by Co-operative Bank with Sh14 billion.

KCB Bank, another major banking institution, recorded Sh8.9 billion in returns from similar investments.

Other significant earners include Diamond Trust Bank (DTB) and Absa Bank Kenya, each pocketing Sh5 billion, while I&M Bank made Sh3 billion.

Standard Chartered Bank (Stanchart) earned Sh2.9 billion, NCBA Bank Sh2 billion, and Stanbic Bank trailed the pack with Sh600 million.

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The figures reflect a shift by banks towards risk free government debt, offering predictable returns in an economic environment marked by rising loan defaults and cautious lending practices.

Treasury bonds have become particularly attractive given their relatively high yields and minimal risk compared to the private sector lending.

Banks are increasingly balancing between traditional lending and government paper to ensure steady revenue streams.