Kenya’s listed banks have continued to reshape the landscape of the Nairobi Securities Exchange as strong earnings and investor demand trigger shifts in the ranking of the most valuable firms.

The rally in bank stocks has not only lifted the market’s capitalization but also pushed lenders into dominant positions previously held by telecommunications and manufacturing counters.

Equity Group, KCB Group and Co-operative Bank have all recorded sharp gains in market value over recent weeks, driven by rising profitability, resilient loan growth and sustained dividend payouts.

The strong performance has come at a time when investors are actively seeking defensive stocks with stable earnings, pushing banks to the forefront of market activity. Equity Group in particular has strengthened its position as one of the top firms on the bourse, while Co-operative Bank has climbed into higher valuation territory after attracting strong trading volumes.

The banking sector’s rally has coincided with subdued performance in Safaricom shares, which have long dominated the NSE in terms of capitalization. Safaricom’s weaker run has created room for banks to close the gap in market rankings, with some analysts suggesting the tide could tilt further in favor of lenders if current momentum continues.

Manufacturers and agricultural counters, once central to the exchange, have also lost ground as investor attention consolidates around financial institutions.

Market observers link the rise in bank valuations to improved credit demand, declining default risks and regulatory support that has reinforced stability in the financial system.

The stronger-than-expected first half earnings reports released by leading banks have further attracted both local and foreign investors who view lenders as relatively safer bets amid a volatile economic environment.

The shift in market leadership is expected to intensify competition among the largest firms at the NSE. Investors are closely watching whether the rally in banking stocks can be sustained, particularly in the face of rising interest rates and tightening liquidity.

Nonetheless, the surge has already redefined the profile of the exchange, confirming the financial sector as the new driver of value creation at the bourse.