Kenya’s National Treasury is planning to inject KSh1.125 billion in Consolidated Bank of Kenya as the State-owned lender moves to meet new minimum capital requirements under revised banking laws.
The bank, which is 93.5% owned by the government, expects the funds by the end of June as part of a broader plan to raise over KSh3.54 billion. The recapitalisation effort also includes the sale of non-core assets such as selected buildings, already approved by the Treasury.
According to the lender, the capital injection is part of a comprehensive core capital build-up plan submitted to Central Bank of Kenya. The regulator raised the minimum core capital to KSh3 billion effective 1 January 2026 under the Business Laws Amendment Act 2024.
Consolidated Bank has struggled to meet even the previous KSh1 billion requirement, placing it under increased pressure following the new threshold.
Financial disclosures show the bank closed December 2025 with negative core capital of KSh546.07 million. This leaves a gap of more than KSh3.54 billion to meet the regulatory minimum.
Recovery plan hinges on capital injection and asset sales
The revised law sets a progressive capital increase roadmap requiring banks to raise core capital to KSh5 billion by the end of 2026, KSh6 billion by 2027, KSh8 billion by 2028 and KSh10 billion by 2029.
To bridge the deficit, the lender is relying on Treasury support, disposal of non-core assets and internally generated revenue. However, sustained profitability will be necessary to offset accumulated losses of KSh4.22 billion.
In a significant turnaround, the bank reported a net profit of KSh198.18 million in the year ended December 2025. This marks a recovery from a net loss of KSh155.22 million recorded in 2024 and represents its first profit in 11 years. The last profit was recorded in 2014 at KSh44.42 million.
The improved performance was driven by strong income growth. Net interest income rose 38.4% to KSh1.3 billion while non-interest income increased 28.1% to KSh1.93 billion. These gains outpaced a 4.3% rise in operating expenses to KSh1.74 billion.
Acting Chief Executive Dominic Murage said the results reflect the impact of efficiency measures implemented across the bank, noting that cost discipline remains a priority.
He added that small and medium enterprises remain central to the lender’s business model, with plans to deepen partnerships with government agencies, universities and ministries.
The coming months will be critical as Consolidated Bank works to secure Treasury funding, execute asset sales and sustain profitability to meet regulatory requirements and stabilise its financial position.