Egypt bank seeks to buy small Kenyan institution

In Summary

• The Competition Authority of Kenya is analysing the Egyptian lender’s application.

The Central Bank of Kenya governor Patrick Njoroge during a past press briefing.
The Central Bank of Kenya governor Patrick Njoroge during a past press briefing.
Image: FILE

Egypt’s Commercial International Bank is looking to buy a controlling stake in Mayfair Bank, one of Kenya’s smallest banks, Kenya’s competition authority said.

The Competition Authority of Kenya is analysing the Egyptian lender’s application to be allowed to buy the controlling interest in Mayfair, the regulator told Reuters on Thursday, without saying when it expected to reach a decision.

The authority did not provide any more information and there was no immediate comment from the central bank about the transaction.

Commercial International Bank Egypt was not immediately available for comment.

Mayfair, which opened its doors in August 2017, has about five outlets and assets of Sh8.2 billion ($80.79 million), according to its financial statement for the nine months to the end of September. It posted a loss of 250 million shillings in that period.

Kenya’s banking industry has had a flurry of deals in the last three years after the government capped interest rates, forcing banks to look for survival strategies.

Banking executives say the country is “over-banked”, with about 40 commercial lenders serving a population of 47 million people, about one bank for just over a million people, instead of one bank per two million people, which they consider more appropriate.

Recent deals in the sector include the merger of NIC Bank and CBA Group to form NCBA, and the acquisition of National Bank of Kenya by KCB Group.

Equity Group, which is one of the top banks, has looked slightly further afield, announcing a series of acquisitions in the Democratic Republic of Congo and other African countries this year.

The government removed the cap on lending rates last month, to try to boost credit growth, but commercial banks have not yet announced new pricing for loans.

Patrick Njoroge, the central bank governor, said last month he did not expect banks to return to the “wild west kind of banditry”, after the removal of the cap.