In a move that could reshape East Africa’s financial future, Kenya Commercial Bank (KCB) Group Limited is poised to become the first foreign bank to enter Ethiopia in half a century, sources at the National Bank of Ethiopia (NBE) reveal.
Negotiations between KCB executives and Ethiopian regulators are already underway. The bank is expected to lay the groundwork for its expansion “in the near future,” as the country finally opens its tightly guarded banking sector to the world.
A historic opening in Addis Ababa
For decades, Ethiopia stood as one of the last major economies in Africa to bar foreign banks—but that changed with a bold legislative pivot last November. Lawmakers passed an amendment to the Banking Business Proclamation, granting foreign banks four routes into the market: open a local branch, launch a subsidiary, buy into a local bank, or operate via a representative office.
But the doors aren’t fully open just yet. The law still limits foreign ownership in local banks to 40%, while a domestic bank may sell no more than 49% of its authorized shares to foreign entities.
Still, for players like KCB, that’s more than enough to dive in.
“An underserved giant”: why KCB is betting on Ethiopia
Speaking to 1st Afrika last month, KCB Group CEO Paul Russo made it clear: Ethiopia’s 120 million people, many of them without access to formal financial services, represent a massive opportunity.
“It’s not just about market size,” Russo noted. “It’s about impact. Ethiopia is one of the last frontiers for true banking transformation on the continent.”
And KCB isn’t entering blindly. The banking behemoth already runs a network of successful subsidiaries across East Africa, including Rwanda, Uganda, Tanzania, Burundi, and South Sudan. In 2024 alone, it posted over $1.5 billion in revenue and $478 million in profit—numbers that signal serious firepower for a long game in Ethiopia.
A cautious but strategic entry
KCB’s entry method hasn’t been officially disclosed, but sources say a wholly-owned subsidiary or a local branch office are likely options, especially since Ethiopia is keen to retain majority local control over its financial institutions.
For Ethiopia, this isn’t just about foreign investment. It’s about modernizing a sluggish financial system, increasing access to credit, expanding digital banking, and aligning with global financial norms—all goals Prime Minister Abiy Ahmed has tied to his broader economic reform agenda.
Why this matters for the region
KCB’s arrival would not just mark a turning point for Ethiopia—it could trigger a wave of East African banking integration, bringing the Horn closer together through financial connectivity.
More importantly, it sends a loud signal to other foreign banks—from Egypt to France to the UAE—that Ethiopia is no longer closed for business.
The African banking map is being redrawn—and Addis Ababa is finally back on it.