The National Treasury has allocated Sh1.125 billion to shore up capital for Consolidated Bank of Kenya, offering a boost to the State-owned lender that is currently in breach of regulatory capital requirements.
The 2026-27 draft programme-based budget shows the Treasury has earmarked the allocation to the lender in which it owns 93.5 percent stake.
The money, added to Consolidated’s plan to dispose of non-core assets, including select buildings, will boost the lender’s race to raise over Sh3.54 billion required to comply with revised capital law.
‘Amount of funds injected to shore up capital for Consolidated Bank of Kenya Limited,’ Treasury disclosed under the planned allocation to the State Department for Public Investments and Assets Management.
The lender is awaiting fresh State injection by the end of June and has also been cleared to dispose of some assets.
The bank is among those yet to comply with the requirement to boost minimum core capital to Sh3 billion effective January 1, 2026. It closed December 2025 with core capital at negative Sh546.07 million, leaving it requiring at least Sh3.54 billion in order to comply with the minimum required core capital of Sh3 billion.
Consolidated was already struggling to comply with the old minimum core capital requirement of Sh1 billion and the enhancement introduced through the Business Laws (Amendment) Act 2024 piled more pressure on the lender.
Under the Business Laws (Amendment) Act 2024, banks were required to increase the minimum core capital in the banking sector to Sh3 billion from Sh1 billion by the end of December 2025.
The law requires banks to boost their minimum core capital further to Sh5 billion by the close of 2026, Sh6 billion by the end of 2027, Sh8 billion in 2028 and Sh10 billion by the close of 2029, pointing to the fundraising roadmap facing banks such as Consolidated.
In March, Consolidated said that part of its core capital boost will come from internally generated revenue. However, this will require that it posts sustained profits to erase accumulated losses of Sh4.22 billion.
In the financial year ended December 2025, the lender posted a net profit of Sh198.18 million, marking an improvement from Sh155.22 million net loss in a similar period in 2024. The latest profit is the first one in 11 years, with the previous net profit coming in 2014 at Sh44.42 million.
The net profit came in the period net interest income grew 38.4 percent to Sh1.3 billion and non-interest income rose 28.1 percent to Sh1.93 billion. The increased income more than covered the 4.3 percent rise in operating expenses to Sh1.74 billion.
‘This performance demonstrates the impact of the strategic efficiency measures we implemented across the business, which have enabled significant cost savings. Maintaining these efficiency levels will remain a priority going forward,’ said Dominic Murage, the acting CEO at Consolidated Bank.