Kenyan banks shrug off red flags over investment in Treasury bills

The concentration of government debt on banks’ balance sheets constrains their credit strength and ties their financial health to sovereign risk.

Photo credit: AI Assisted Graphic

Kenyan commercial banks are facing growing pressure over sovereign risk arising from heavy investments in government securities, which expose their balance sheets to the government’s debt position.

The lenders’ holdings of Treasury bills and bonds have risen to Ksh2.53 trillion ($19.61 billion) as at September 25, 2026, raising concerns among the World Bank and international credit rating agencies Moody’s and Fitch.