Kenya's CBA and NIC banks have merged to form NCBA. PHOTO | FILE | NATION MEDIA GROUP
The year saw Kenya’s banking sector record several mergers and
acquisitions and more are predicted in the next two years as capital
raising options diminish for smaller struggling lenders.
Nigeria’s
largest retail lender, Access Bank Plc, acquired Kenya’s Transnational
Bank associated with retired President Daniel arap Moi. The bank’s
profits have been on a decline from Ksh168 million ($1.68 million) in
2015 to a loss of Ksh71 million ($710,000) last year.
Loss-making
Mayfair Bank, linked to politician Peter Kenneth, is being sold to a
leading Egyptian bank, the Commercial International Bank, just two and a
half years since it started operations.
Bleeding Spire Bank is also looking for a strategic investor as is Jamii Bora Bank and Consolidated Bank.
Rare merger activity has also been recorded at the top band of the country’s banking sec-tor.
Kenya’s largest bank by assets — KCB Group — this year acquired capital-starved National Bank of Kenya (NBK).
Commercial Bank of Africa and NIC Bank are concluding a merger, expected to create the country’s third-largest bank by assets.
With
more than 40 banks in the market, many financial sector analysts have
for several years now said the sector is overbanked and that
consolidation was the way out, especially for mid and lower-tier
lenders.
“We are not done yet and
there is all indication of more market-driven consolidations in the
banking sector,” said Central Bank of Kenya (CBK) Governor Patrick
Njoroge.
In Kenya and Tanzania, the top five banks account for 46 per cent and 55 per cent of the sector assets, respectively.
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