An advocate of the High Court is urging the government to privatize Kenya Commercial Bank (KCB) by divesting its 19 per cent stake in the financial institution. 

Francis Wanjiku argues that this move would enable the government to raise funds for crucial sectors such as healthcare and infrastructure without resorting to increased taxation or public debt. 

Valued at Sh24 billion, Wanjiku believes that the sale would free up resources for stalled government projects, ultimately improving service delivery. His proposal comes at a time when the healthcare sector is experiencing funding shortfalls tied to the Social Health Authority (SHA), affecting the provision of essential services. 

The government owes hundreds of millions in unpaid healthcare expenses. Similarly, the Ministry of Public Works has cited funding constraints as the reason for delayed infrastructure projects. 

“To maximize value, I propose a structured divestiture, possibly through a public offering on the Nairobi Securities Exchange, where KCB is listed, ensuring transparency and broad participation,” Wanjiku stated in a letter addressed to Treasury Cabinet Secretary John Mbadi.  

He emphasized that regulatory oversight from the Central Bank of Kenya and the Capital Markets Authority would safeguard financial sector stability while allowing the Treasury to redirect proceeds to high-impact public investments. 

KCB’s financial strength underscores the timing of the proposal. In 2024, the bank recorded a 24 per cent increase in revenue, reaching Sh204.9 billion from Sh165.2 billion in the previous year. The balance sheet closed at Sh1.96 trillion, supported by a robust deposit base and a stable loan portfolio. Profit after tax surged by 64.9 per cent to Sh61.8 billion, compared to Sh37.5 billion in 2023. 

Right moment to divest? 

Wanjiku argues that the government’s initial objective of stabilizing KCB has been fulfilled, making this the right moment to divest. “By selling its shares, the Treasury can unlock over Sh24 billion in value, mitigate exposure to market risks, and empower KCB to generate even greater returns under private ownership,” he said. 

He also pointed to KCB’s position as a regional financial powerhouse. As of December 31, 2024, the bank’s market capitalization stood at Sh133.7 billion, with a share price of Sh41.60. The institution operates 536 branches and serves 33 million customers, including 24 million digital users. Wanjiku maintains that privatization would allow KCB to expand without bureaucratic constraints.  

“Private ownership could attract additional capital, as reflected in KCB’s shareholder equity growth of 21 per cent to Sh274.9 billion, strengthening its capacity to fund expansion across Kenya, Tanzania, Rwanda, Uganda, Burundi, South Sudan, and the Democratic Republic of Congo,” he added. 

This proposal comes as the government seeks alternative funding sources amid a growing fiscal deficit, exacerbated by the rejection of the Finance Bill 2024/25. The government is currently negotiating the ninth revision of its International Monetary Fund (IMF) agreement to unlock $3.6 billion (Sh464.4 billion) under the Extended Fund Facility (EFF) and the Extended Credit Facility (ECF) programmes.