Table of Contents
Key Points
- KCB explores acquisitions in Ethiopia after banking reforms, targeting growth opportunities in one of Africa’s largest untapped financial markets.
- CEO Paul Russo seeks exemption from Ethiopia’s 49% foreign ownership cap, leveraging Kenya’s diplomatic ties and exploring local partnerships.
- Expansion builds on KCB’s fintech investments, including Riverbank Solutions, strengthening its regional growth strategy and digital banking footprint.
Kenya Commercial Bank (KCB) Group Plc, a Nairobi-based financial services company led by Kenyan banker Paul Russo, is positioning for entry into Ethiopia after the country began liberalizing its banking sector.
The planned expansion highlights Nairobi’s ambition to extend its financial reach into one of Africa’s largest untapped markets, with KCB weighing an acquisition and exploring possible exemptions from foreign ownership limits.
Ethiopia opens banking market
Ethiopia, with a population exceeding 120 million, started loosening restrictions on its tightly controlled banking system in late 2024. The National Bank of Ethiopia began accepting applications from foreign lenders in June 2025, permitting them to set up subsidiaries or take minority stakes.
Group CEO Paul Russo said KCB is evaluating how to navigate the 49 percent foreign ownership cap, pointing to Kenya’s diplomatic ties with Ethiopia as an advantage. “Whenever a market like that opens, getting an exemption is not difficult,” he said. KCB is also in talks with potential local partners to strengthen its chances of becoming an early entrant.
Technology bets bolster KCB’s regional strategy
The expansion drive comes as Ethiopia’s lenders grapple with pressure from Safaricom’s M-Pesa, launched in 2023, which has accelerated digital adoption in the country. Russo views this shift as a chance to leverage KCB’s experience in mobile and agency banking.
In March 2025, the Nairobi-based group acquired 75 percent of fintech provider Riverbank Solutions for $15.5 million, bolstering its digital finance portfolio. The move fits into KCB’s broader strategy of using technology to expand cross-border services.
KCB has steadily expanded beyond Kenya over the past decade, with subsidiaries now critical to its performance. By September 2024, operations outside its home market contributed more than a third of profit and assets, compared with less than 5 percent ten years earlier.
Its Tanzanian subsidiary reported $48.6 million in revenue and $20 million in profit last year, underlining the importance of regional units to the group’s growth.
Building a regional force
Founded in 1896, KCB oversees banking, insurance, asset management, and investment subsidiaries. Its network includes 528 branches, 1,313 ATMs, and more than 1.2 million merchants and agents across East Africa.
Financially, KCB remains strong. The Nairobi-listed lender posted a net profit of Ksh32.3 billion ($250 million) in the first half of 2025, up 8 percent from a year earlier. The results give Russo room to pursue expansion while reinforcing existing businesses.
A successful entry into Ethiopia would deepen Nairobi’s financial reach and cement KCB’s reputation as one of the region’s most ambitious cross-border lenders.
