7 Major Consolidations In Kenya’s Banking Sector

On 27th January 2020, Nigerian lender, Access Bank PLC completed the acquisition of a 100.0 percent stake in Transnational Bank PLC for an undisclosed amount, with Access Bank PLC targeting to enhance its corporate and retail banking business in Kenya through the acquisition.

Access Bank is Nigeria’s largest lender by assets, with an asset base of USD 22.9 billion as of December 2020. The deal will see Nigerian banks deepen their presence in Kenya with the United Bank of Africa (UBA) and Guarantee Trust Bank already in the market.

On 7th April 2020, the Central Bank of Kenya (CBK) approved the acquisition of a 51.0 percent stake in Mayfair Bank Limited by an Egyptian lender, Commercial International Bank (CIB), effective 1st May 2020 for an undisclosed amount.

The Central Bank of Kenya (CBK) welcomed the transaction, citing it will diversify and strengthen the resilience of the Kenyan banking sector. Commercial International Bank, Egypt’s leading private sector bank, has an asset base of USD 27.2 billion (Kshs 3.0 trillion) as of December 2020.

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On 4th May 2020, the Central Bank of Kenya approved the acquisition of Imperial Bank’s assets and assumption of liabilities worth 3.2 billion shillings each by KCB Group effective 2nd June 2020.

The move will see Imperial Bank depositors paid a total of Kshs 3.2 bn over a period of 4 years and will have cumulatively recovered 37.3 percent of the deposits since 2015 when payments commenced.

Imperial Bank was put under receivership (a process that can assist creditors to recover funds in default and can help troubled companies to avoid bankruptcy) in October 2015 due to inappropriate banking practices, with the CBK transferring Imperial Bank’s management and control to the KDIC.

On 25th August 2020, Co-operative Bank Kenya completed the 90.0% acquisition of Jamii Bora Bank and rebranded it to Kingdom Bank Limited.

The transaction that had started in March for a 100.0% purchase of the Bank at Kshs 1.1 bn, was completed in August after receiving all the approvals, with Co-operative Bank varying its initial offer of 100.0% stake to a 90.0 percent stake.

Equity Group Holdings completed the 66.5 percent stake acquisition of the Banque Commerciale Du Congo (BCDC) at a cost of USD 95.0 million (Kshs 10.3 billion).

Initially, the deal was to cost USD 105.0 mn (Kshs 11.4 bn), however factoring in the adverse effects of the COVID-19 pandemic on the two economies, the two parties agreed to reduce the amount to USD 95.0 million (Kshs 10.3 billion).

I&M Holdings plc issued a circular to its shareholders on 3rd November 2020 revealing it would pay Kshs 3.6 billion to acquire 90.0% of Orient Bank Limited Uganda (OBL) share capital.

The amount would be subject to adjustments on account of several factors including exchange rate fluctuations and amounts raised from the sale of the Ugandan bank’s property in Kampala (Orient Plaza).

KCB Group disclosed it had entered into an agreement with Atlas Mara Limited (ATMA) to acquire a 62.1 percent stake in Banque De Populaire du Rwanda (BPR) in Rwanda and a 100.0 percent stake in African Banking Corporation Ltd Tanzania (ABC Tanzania).

The Group also separately intends to make an offer to acquire the remaining shares from the respective shareholders. The proposed acquisition is subject to approval from the shareholders, the Central Bank of Kenya, the National Bank of Rwanda, the COMESA Competition Commission, and the Capital Markets Authority.

KCB also agreed to purchase a 96.6  percent stake of ABC Tanzania held by ABC Holdings Limited (ABCH), the wholly-owned subsidiary of Atlas Mara. Additionally, KCB separately intends to make an offer to acquire the remaining shares of 3.4 percent from the Tanzania Development Finance Company Limited.