The Nairobi Securities Exchange Plc (NSE) recently launched a dedicated Banking Sector Index. This new benchmark, which took effect from October 1, 2025, is designed to provide investors with a transparent and reliable gauge for tracking the performance of one of the market’s most vital segments.
The index, which is both market capitalization-weighted and float-adjusted, will meticulously track the freely tradable shares of eleven listed banking institutions which include Absa Bank Kenya Plc, BK Group Plc, Diamond Trust Bank Kenya Ltd, Equity Group Holdings Plc, HF Group Plc, I&M Group Plc, KCB Group Plc, NCBA Group Plc, Stanbic Holdings Plc, Standard Chartered Bank Kenya Ltd, and The Co-operative Bank of Kenya Ltd. This will create a focused lens through which to view the sector’s health and trajectory.
The introduction of this specialized index is poised to deliver wide-ranging benefits to the market ecosystem. It will serve as a crucial tool for guiding portfolio allocation and sharpening investment decision-making for both local and international investors. By offering a clear benchmark, the index enhances the visibility of listed banks and is expected to spur more robust sector-based research and analysis.
Furthermore, its launch is a strategic step towards product innovation, laying a foundational framework for the future development of Exchange Traded Funds (ETFs) and other index-linked financial products, thereby deepening market activity and broadening participation.
According to Mr. Frank Mwiti, NSE Chief Executive, this development highlights the exchange’s commitment to innovation and meeting evolving investor needs.
“The launch of the Banking Sector Index is fully aligned with our new strategy of driving product diversification and deepening market activity. Beyond providing investors with a reliable performance tracker, the Index will highlight the banking sector as a key driver of economic growth and create a strong foundation for future product innovation. This is a critical step in positioning the NSE as a modern, globally competitive marketplace,” he added.
The launch comes at a time when the banking sector has demonstrated robust performance between January and September 2025, fueled by strong earnings, balance sheet expansion, and continuous innovation in financial services. The ground rules for the new Banking Sector Index have been made publicly available, ensuring transparency and accessibility for all market participants.
