BANKING | Kenyan Banks Report $483 Million in Forex Transaction Losses in 2024

This marked a sharp reversal from 2023, when the Kenyan shilling had depreciated by between 7.1% and 19.7% against these regional currencies, resulting in currency translation gains of $246 million for the banks.

kodzilla··3 min read

Kenyan banks recorded currency losses totaling KES 57 billion ($438.3 million) in the financial year ending December 31 2024, due to the strengthening of the Kenyan shilling (KES) against the U.S dollar and the currencies of neighboring countries where they operate.

  • The Kenyan shilling (KES) appreciated by 14.8% against the Ugandan shilling
  • 15.3% against the Tanzanian shilling
  • 20.4% against the Burundian franc, and
  • 25% against the Rwandan franc

This marked a sharp reversal from 2023, when the Kenyan shilling had depreciated by between 7.1% and 19.7% against these regional currencies, resulting in currency translation gains of KES 31.9 billion ($245.94 million) for the banks.

Equity Group, which operates regional subsidiaries in Uganda, Tanzania, Rwanda, the DRC, and South Sudan, now sees half of its KES 1.8 trillion ($13.8 billion) balance sheet tied to these markets. In 2024, the group recorded a currency translation loss of KES 22.8 billion ($175.3 million) – down from a gain of KES 17.4 billion ($133.8 million) in 2023.

The bank also attributed part of the drop in its loan book – from KES 887.4 billion ($6.8 billion ) to KES 819.2 billion ($6.2 billion) – to the negative impact of currency translation losses on loans issued through its regional subsidiaries.

  • One major hit came from its DRC subsidiary, Equity BCDC, whose asset values in Shilling terms dropped due to the Kenyan Shilling appreciating by 21% against the U.S dollar. In contrast, the dollar had strengthened by a similar margin the previous year. Since the DRC heavily relies on the U.S dollar for everyday transactions, the gains in the Kenyan Shilling intensified translation losses for Equity and other banks.
  • KCB Group, which also operates in the DRC, Uganda, Tanzania, Rwanda, Burundi, and South Sudan, reported a forex translation loss of KES 17.1 billion ($13.4 million) in 2024 – compared to a KES 1.96 billion ($15 million) gain in 2023. Both KCB and Equity, the region’s largest lenders by assets, have expanded rapidly in recent years, especially in Rwanda and the DRC, through strategic acquisitions.
  • I&M Group posted translation losses of KES 7.3 billion ($56.1 million), reversing a gain of KES 5.4 billion ($41.5 million) in 2023.
  • DTB saw a loss of KES 6.3 billion ($48.4 million), compared to a gain of KES 5.3 billion ($40.7 million) the year before.
  • NCBA recorded a KES 2.6 billion ($19.9 million) loss, flipping from a KES 2.04 ($15.67 million) billion gain, while
  • Stanbic’s currency-related losses from its South Sudan operations widened to KES 951 million ($7.3 million), up from KES 222 million ($1.7 million) in 2023.

Kenya’s major corporates have established themselves across the East and Central Africa region.

Major local banks such as Equity Group, KCB Group, NCBA, DTB Group, Stanbic Bank, and I&M Group have regional subsidiaries operating in countries including Uganda, Tanzania, Rwanda, South Sudan, Burundi, and the Democratic Republic of Congo (DRC).

According to reports, the banks have been doing pretty well in the overseas markets, but the constant currency depreciation poses a challenge to their finances.

See also

Last year [2024], Kenya’s most valuable company, Safaricom, also reported a 17.7% in profits to KES 28.1 billion ($216.6 million) from KES 34.1 billion ($262.8 million) on account of the 106% depreciation of the Ethiopian Birr.


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