NCBA Investment Bank has highlighted KCB Group and Rwanda-based BK Group as its top banking picks as the sector approaches the nine-month earnings period.

The broker rates KCB a BUY with a target price of KSh110.51, which is 24.2 per cent higher than the Monday closing price of KSh89.00, and rates BK Group a BUY with a target of KSh75.69, 22.8 per cent above its current level of KSh61.65.

NCBA projects a forward dividend yield of 10.9 per cent for BK Group, placing it among the highest yields for listed banks, while KCB’s forward yield is estimated at 6.7 per cent.

The recommendations come as Kenyan banks are set to publish their nine-month to September (9M26) results, following a first half in which average earnings rose 19.6 per cent year-on-year.

NCBA notes that much of the positive earnings news is already reflected in share prices, with banks trading at roughly 1.1 times estimated 2026 book value and 1.0 times 2027 book value, close to the analysts’ fair-value multiples of 1.07 and 1.02 respectively.

Of the ten banks covered, the remaining eight are rated HOLD; six of these already trade above NCBA’s target prices, including I&M (target KSh70.36 versus KSh85.00) and Family Bank (target KSh22.13 versus KSh26.70), both about 17 per cent above their targets.

Stanbic, Standard Chartered, DTB and Equity are priced 4 to 9 per cent above their targets, while ABSA and Co-op Bank sit slightly below, offering roughly 3 to 4 per cent upside.

For income-focused investors, Standard Chartered’s forward dividend yield of 11.2 per cent is highlighted as notable.

Bank stocks fell in October due to profit-taking and ex-dividend trading, with ABSA down 9.7 per cent, Equity down 9.3 per cent and Stanbic down 7.9 per cent during the month.

Outside the banking sector, NCBA assigns SELL ratings to BOC Kenya, Carbacid and Sasini, with target prices 33.9, 36.7 and 23.6 per cent below current levels respectively, and HOLD ratings to Safaricom, BAT Kenya, EABL and Kakuzi.

The bank also indicates that it is reviewing its valuation models for telecoms and manufacturing stocks, and explains that under its rating system a BUY implies an expected 12-month total return, including dividends, of more than 15 per cent, while a SELL suggests an expected loss exceeding 15 per cent.