In the shadowy corridors of Kenya’s financial system, where billions in illicit funds flow undetected, a bombshell confidential report from the Financial Reporting Centre (FRC) has thrust two prominent foreign owned banks into the spotlight. Dated September 22, 2025, the document accuses Commercial International Bank Kenya (CIB Kenya) and United Bank for Africa (UBA Kenya) of facilitating suspicious cross border transfers totaling over KSh 139 million, potentially linked to money laundering schemes. These revelations expose not just isolated lapses but systemic vulnerabilities in Kenya’s banking sector, vulnerabilities that could jeopardize the country’s bid to exit the Financial Action Task Force’s grey list and erode trust in its role as East Africa’s financial hub.
Kenya’s battle against money laundering has intensified since its placement on the FATF grey list in February 2024, a designation signaling strategic deficiencies in anti money laundering and counter terrorism financing frameworks. The FRC, Kenya’s financial intelligence unit established under the Proceeds of Crime and Anti Money Laundering Act of 2009, serves as the frontline defender. It supervises over 2000 reporting institutions, including banks, and has flagged a staggering KSh 6.38 trillion in suspicious transactions between 2021 and 2024, often routed through shell companies tied to corruption, fraud, and even terrorism financing. Foreign owned banks, with their expansive international networks, have emerged as high risk vectors. A May 2024 FRC assessment explicitly warned that foreign ownership in local lenders presents terrorism financing risks, citing lax due diligence on cross border flows from high risk jurisdictions like Laos and Nigeria. The September report amplifies these concerns, painting a picture of complicit facilitation rather than mere oversight.
At the epicenter is CIB Kenya, the Egyptian owned subsidiary of Commercial International Bank Egypt, which acquired full control of the former Mayfair Bank in January 2023. The FRC probe centers on a single wire transfer of US$523599.85 (KSh 69.5 million) received in 2025 from Phongsavanh Bank Ltd in Laos. The funds were funneled through the client account of a Nairobi based law firm, a classic red flag for layering in money laundering typologies, where legal entities obscure beneficial ownership. Phongsavanh Bank, a mid tier Laotian institution founded in 2007, has long been dogged by scandals: regulatory non compliance, governance breakdowns, bribery allegations, and facilitation of suspicious deals. Flagged by the Asia Pacific Group on Money Laundering for feeble financial controls and stalled AML reforms, Laos itself ranks as a high risk jurisdiction with scant commercial ties to Kenya, amplifying the transaction’s anomaly.
What elevates this from routine suspicion to potential scandal is the recipient’s explanation: the funds were purportedly earmarked for President William Ruto’s flagship Affordable Housing Programme. Launched in 2023, the initiative relies on domestic funding streams, including a 1.5% housing levy that amassed KSh 73.2 billion by June 2025, supplemented by employer contributions and tax incentives, projecting a total war chest of KSh 120 billion with KSh 90 billion already deployed in construction. An unsolicited influx from Laos, a nation with negligible real estate linkages to Kenya, strains credulity. Investigators suspect this narrative as a veneer for deeper crimes: corruption kickbacks, tax evasion, or even proceeds from trafficking networks exploiting East West trade corridors. Under the Act, banks must conduct enhanced due diligence for such atypical transfers, verifying origins, beneficiaries, and purposes. CIB’s alleged failure here constitutes a prima facie violation, prompting the FRC to refer the matter to the Kenya Revenue Authority for tax audits and asset tracing.
Scrutiny has zeroed in on CIB’s CEO, Abhinav Nehra, a 30 year veteran of African banking who assumed the helm in January 2025 after stints at Citigroup, UBA, and Ecobank. Approved by the Central Bank of Kenya, Nehra was tasked with injecting US$8.2 million in fresh capital to meet regulatory thresholds, modernizing six branches across Nairobi, Mombasa, and Eldoret, and pivoting toward SME lending and Egypt Kenya trade finance via the Temenos T24 platform. Yet, the probe questions his oversight of compliance protocols. As the ultimate accountable officer, Nehra faces personal liability under April 2025 amendments to the Act, which bolster FRC enforcement powers and impose steeper penalties for non reporting, up to KSh 5 million fines or license revocation for institutions. CIB has stonewalled inquiries, offering no updates on fund freezes, internal audits, or sender verifications, fueling perceptions of a toxic compliance culture.
Parallel suspicions engulf UBA Kenya, the Kenyan arm of Nigeria’s UBA Group, a pan African giant with footprints in 20 countries. On May 8, 2025, UBA processed two international transfers totaling US$533599.85 (also KSh 69.5 million), eerily mirroring CIB’s sum, destined for several Kenyan individuals via another prominent Nairobi law firm. The inflows originated from entities in Nigeria and Laos, jurisdictions both plagued by AML weaknesses: Nigeria battles oil bunkering fraud and cyber scams, while Laos grapples with casino linked laundering. A joint report from at least two Kenyan investigative agencies, corroborated by FRC intelligence, brands these as illicit money transfers, breaching the Act’s suspicious transaction reporting mandates. Unlike CIB’s case, no explicit end use was disclosed, but the law firm conduit and multi recipient structure scream structuring, a tactic to evade detection thresholds.
UBA’s woes compound at a pivotal moment. CEO Mary Mulili, steering the bank since 2023, oversees operations in a market where UBA has pledged aggressive expansion, including digital wallets and remittance corridors. Yet, the scandal casts a pall over UBA Group Chairman Tony Elumelu’s October 2025 vow of US$1 billion (KSh 129.15 billion) for Kenyan infrastructure during a high profile summit with President Ruto. Regulators now probe UBA’s internal controls: Did automated alerts flag the transfers? Were beneficial owners vetted against sanctions lists? Silence from Mulili’s office mirrors CIB’s reticence, inviting speculation of deeper entanglements.
The implications ripple far beyond these banks. For CIB and UBA, consequences loom large: CBK mandated audits, potential fines exceeding KSh 50 million each, and reputational hemorrhaging that could deter SME clients, vital to Kenya’s 80% informal economy. Nehra’s career, built on transformational leadership across 34 African markets, teeters; Mulili’s suitability for public private partnerships is in doubt. Parent companies face extraterritorial heat: Egypt’s central bank may scrutinize CIB’s Nairobi outpost, while Nigeria’s EFCC could audit UBA Group’s regional flows.
Broader still, the report underscores foreign banks’ double edged sword. Comprising 15% of Kenya’s 38 licensed lenders, these institutions drive FDI, US$1.2 billion in 2024 alone, but their global ties amplify laundering risks, as noted in FRC’s 2025 trends report on cross border cash movements. Kenya’s EU high risk AML listing in June 2025, alongside surging suspicious filings (up 30% in 2025), threatens correspondent banking ties, hiking transaction costs by 20 to 30%. If linked to the Affordable Housing Programme, the scandal could trigger forensic audits of public funds, eroding donor confidence amid KSh 2.5 trillion in annual remittances.
Yet, glimmers of reform emerge. The 2025 amendments mandate real time AI driven monitoring, while FRC’s typology studies, detailing lawyer facilitated schemes, empower proactive seizures. Exiting the grey list by 2026 hinges on such vigor; failure risks capital flight and isolation.
This FRC exposé is no isolated tremor but a clarion call. As foreign banks chase Kenya’s growth story, they must fortify AML ramparts, or risk becoming unwitting conduits in the dirty money deluge. For regulators, the onus is enforcement without favoritism; for the public, vigilance against the erosion of hard won financial integrity. In a nation where Sh6.97 trillion in dirty cash was unmasked in 2025 alone, complacency is the true crime.
KenyanHour 