Nyachae-linked lender grapples with mounting losses, capital inadequacy as CBK deadline looms
Credit Bank, the mid-tier lender controlled by the influential Nyachae family, is confronting its most severe financial crisis in decades as accumulated losses balloon to Sh2.1 billion, prompting auditors to cast serious doubts about the institution’s ability to continue operating as a going concern.
The cash-strapped bank, which has been a fixture in Kenya’s financial landscape for nearly four decades, now finds itself at the center of a perfect storm involving regulatory pressure, leadership discord, and a deteriorating loan portfolio that threatens its very survival.
Independent auditors have raised red flags about Credit Bank’s financial viability, with the institution’s accumulated losses reaching Sh2.1 billion by end-2024.
The auditors’ qualification of the bank’s accounts centers on significant doubts about management’s ability to continue operations without substantial capital injection or strategic intervention.
The auditor’s concerns stem from multiple factors: the bank’s weakened capital position, its failure to meet minimum regulatory requirements, and a loan book that has deteriorated significantly under the current management’s watch.
These issues have left the institution non-compliant with Central Bank of Kenya (CBK) prudential guidelines and raised questions about its long-term viability.
The timing of these revelations couldn’t be worse for Credit Bank.
Under new legislation signed by President William Ruto in late 2024, all banks must raise their core capital from the current Sh1 billion to Sh10 billion by 2029, with an interim target of Sh3 billion due by end-2025.
Credit Bank currently falls well short of even the interim threshold, placing it among the most vulnerable institutions in the banking sector.
The bank’s capital adequacy ratio has plummeted to alarming levels, with its total capital to risk-weighted assets standing at just 8.3 percent compared to the required 14.5 percent.
The institution’s liquidity position is equally concerning, with its liquidity ratio at 15.1 percent – significantly below the CBK requirement of 20 percent.
This liquidity squeeze has forced the bank to rely heavily on expensive wholesale funding, further eroding its already thin profit margins.
Leadership under fire

Betty Korir, CEO Credit Bank.
CEO Betty Korir, despite her two decades of banking experience and previous accolades, faces mounting pressure from the board over her handling of the crisis.
Sources close to the bank indicate that board members are increasingly dissatisfied with her management of the capital shortfall and the deteriorating quality of the loan portfolio.
The most contentious issue appears to be a significant increase in unsecured, high-risk loans issued under her tenure.
The bank’s non-performing loans surged by Sh3.5 billion in the year to December 2024, constituting nearly three-fifths of its total loan book.
Critics argue these loans were granted with insufficient oversight and may have been influenced by considerations beyond pure commercial merit.
Internal speculation suggests some lending decisions may have been tainted by personal interests, further undermining confidence in the leadership at a critical juncture when transparency and sound governance are paramount.
The crisis places the Nyachae family’s banking legacy in jeopardy.
Credit Bank, originally incorporated in 1986 as Credit Kenya Limited, has been closely associated with the late Simeon Nyachae, a prominent politician and businessman.
His widow, Grace Nyachae, remains a founding director and key figure in the bank’s governance structure.
The family’s financial services empire, which has weathered numerous challenges over the years, now faces its most serious test.
The bank’s failure would not only represent a significant financial loss but also damage the family’s reputation in Kenya’s business community.
The CBK has placed Credit Bank under enhanced supervision, closely monitoring its operations amid concerns about potential systemic risks.
The regulator’s intervention comes as it seeks to prevent a repeat of the Imperial Bank and Chase Bank collapses that shook the sector in previous years.
Recent regulatory actions include restrictions on the bank’s ability to open new branches, limits on executive compensation, and requirements for monthly reporting on liquidity and capital positions.
The CBK has also mandated that the bank engage a consultant to develop a comprehensive turnaround strategy.
Despite the mounting challenges, Credit Bank executives are pursuing multiple avenues to shore up the institution’s capital position.
These include potential rights issues to existing shareholders, equity sales to strategic investors, and even preliminary discussions about possible partnerships or mergers.
However, the bank’s options are limited by the broader market conditions and investor skepticism.
The Nairobi Securities Exchange has seen subdued activity in recent months, making it difficult for distressed institutions to raise capital through public offerings.
The bank had previously announced plans to list on the NSE by end-2023, aiming to raise at least Sh1 billion from public investors.
However, these plans have been indefinitely postponed due to the current financial difficulties and regulatory constraints.
Credit Bank’s struggles reflect broader challenges facing Kenya’s banking sector as it grapples with the new capital requirements.
Smaller banks that cannot quickly adapt or raise sufficient capital are being squeezed out of the market, leading to increased consolidation.
The CBK’s message is clear: only well-capitalized and properly governed institutions will be permitted to operate in the new regulatory environment.
This has created a two-tier system where large, well-established banks are thriving while smaller players struggle to survive.
The coming months will be crucial for Credit Bank’s survival.
The institution must demonstrate significant progress toward meeting the capital requirements or face potential regulatory sanctions, including possible placement under statutory management or forced merger with a stronger institution.
The bank’s board is expected to make critical decisions about its future direction, including potential changes in leadership and strategic partnerships.
Failure to act decisively could result in the bank becoming another casualty of Kenya’s evolving financial landscape.
As the December 2025 deadline approaches, Credit Bank’s fate hangs in the balance.
Its ability to navigate the capital crisis, restore stakeholder confidence, and implement effective governance reforms will determine whether it emerges as a stronger institution or joins the growing list of failed banks in Kenya’s financial history.
The stakes couldn’t be higher – not just for the Nyachae family and the bank’s stakeholders, but for the broader banking sector as it undergoes its most significant transformation in decades.
The writer is a business correspondent covering Kenya’s financial sector. Views expressed are those of the author and do not necessarily reflect the position of this publication.
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