The Central Bank of Kenya plans to
resume licensing of new commercial
banks “very soon”, the governor Patrick
Njoroge said yesterday.
He, however, did not say when the
moratorium will be lifted.
CBK freezed licensing of new
lenders in November 2015, following
concerns that most local banks were
under capitalised and could not withstand
competition, especially from
the highly capitalised foreign banks
which are making inroads in the local
financial sector.
The moratorium, however, did not
apply to mergers and acquisitions.
Njoroge said the local banking sector has made huge improvements over
the past year, adding that CBK’s supervision
department has improved its
monitoring capacity.
“We have made huge improvements
so far and I am glad to say that the
moratorium will be lifted very soon,”
he said during a press briefing.
“There is huge interest in the local
financial sector and this is evident because
of the amalgamation and acquisition
of banks that we have seen this
year. CBK welcomes this interest”.
The deals that have been successful
includes the acquisition of a 10.68 per
cent stake in I&M Holdings by UK government-
owned CDC Group in April.
CBK also cleared the acquisition of a
51 per cent stake in the shareholding of
Oriental Commercial Bank by Bank M
of Tanzania in June.
Last week, CBK said it’s aware of a
plan by the Mauritian SBM Holdings to
acquire Fidelity Commercial Bank.
Njoroge said CBK is in talks with an
investor to buy Chase Bank and get it
out of receivership sometime during
the fi rst quarter of 2017.
The CBK took over Chase Bank in
April after a run on its deposits raised
fears it would be unable to repay customers.
Chase ended a nine-month wave
of shut downs which started with the
closure of Dubai Bank and Imperial
Bank in August and October 2015, respectively.
Kenya has one of the highest ratio
of banks relative to population in the
world. ere are 41 banks including
a mortgage financier serving about
44 million people, putting the ratio at
0.93 or simply one bank for every 1.07
million people