• KCB Group is in discussions with Ethiopia’s central bank following a 2024 law that allows foreign banks to operate locally.
• The group may obtain a banking license or acquire shares in an Ethiopian bank.
• With over 100 million people and low banking penetration, Ethiopia presents a major opportunity.

Kenyan banking group KCB has officially opened negotiations with the National Bank of Ethiopia to explore entry into the country’s banking market. The announcement, made on June 6, 2025, signals a potential expansion into one of Africa’s largest untapped financial markets.

The Ethiopian central bank confirmed KCB’s interest and ongoing discussions but provided no timeline for the process. If successful, KCB could either obtain a banking license to establish a subsidiary or acquire equity in a local bank.

This is not KCB’s first attempt to enter the Ethiopian market. The group had expressed interest as early as 2019 as part of its regional growth strategy. However, Ethiopia’s regulatory environment at the time barred foreign banks from operating in the country.

This changed in 2022 when the Ethiopian government announced plans to liberalize the banking sector. A dedicated reform committee was established in 2023 to revise financial laws and open the sector to international investors. In June 2024, the Council of Ministers endorsed a draft bill, which was passed by Parliament in December 2024. The new law permits foreign banks to create local subsidiaries or hold up to 49% equity in domestic banks, with the remaining 51% reserved for Ethiopian ownership.

KCB has maintained a representative office in Ethiopia since 2015. If current talks are successful, the group will expand its footprint beyond its existing operations in Kenya, Uganda, Tanzania, Rwanda, Burundi, South Sudan, and the Democratic Republic of Congo. KCB also operates non-banking subsidiaries in investment banking, asset management, and bancassurance.

As of December 2024, Ethiopia had 32 banks. The Commercial Bank of Ethiopia (CBE), which is state-owned, held 47.9% of total banking assets and 47.1% of deposits.

With a population exceeding 100 million and only 15% of the population using banking services, Ethiopia offers significant potential. KCB could become one of the first foreign banks to establish a presence under the new legal framework. The precise structure of its entry and long-term strategy remains to be determined.