By Brian Ambani
Somalia’s Premier Bank Limited will complete its acquisition of a 62.5 percent stake in First Community Bank later this month after the Central Bank of Kenya (CBK) approved the deal.
The Competition Authority of Kenya (CAK) had also earlier given its nod to the deal that will see the two banks merge. The deal will be completed on March 27.
“The Central Bank of Kenya (CBK) announces the acquisition of 62.5 percent of the shareholding of First Community Bank Limited (FCB) by Premier Bank Limited, Somalia (PBLS) effective March 27, 2023,” CBK said in a statement on Friday.
“This follows CBK’s approval on March 13, 2023, under Section 13(4) of the Banking Act and approval by the Cabinet Secretary for the National Treasury and Planning on March 16, 2023, pursuant to Section 9(1) of the Banking Act,” it added.
FCB, a third-tier lender, had a 0.38 percent market share as of June last year and ranked 27th among Kenya’s 39 banks with Sh22.2 billion in deposits.
Premier Bank is a privately owned Sharia-compliant commercial bank incorporated in Somalia in 2013 and licensed by the Central Bank of Somalia in 2014. The Somalia lender offers retail banking, business, and corporate banking, mobile and internet banking, ATM banking, SWIFT transfers, and international money transfers.
The Somalia bank has 20 branches, 80 ATMs, and over 600 point-of-sales merchants. It is among the large banks in Somalia accounting for 16 percent of the banking sector assets.
The deal makes Premier Bank the first bank in Somalia to establish a majority-owned banking subsidiary in Kenya.
“The acquisition will strengthen the trade and investment ties between Kenya and Somalia. CBK welcomes this transaction that will diversify and strengthen the resilience of the Kenyan banking sector,” said CBK.
The acquisition of FCB by Premier Bank comes barely two months after the Central Bank of Kenya on January 23 approved the takeover of Kenya’s Mayfair Bank by Egypt’s leading private sector bank, Commercial International Bank (CIB).
CIB fully takeover over Mayfair, after purchasing the remaining 49 percent of its shares. It had previously purchased 51 percent of shares in 2020.
MBL, which started operations in August 2017, operates five branches in Nairobi, Eldoret, and Mombasa.
Following the Mayfair buyout, the Cairo-based lender became the first Egyptian bank to establish a presence in Kenya.
CIB is the leading private-sector bank in Egypt, with a total asset base of approximately Sh3.09 trillion ($24.18 billion).
It is listed on the Egyptian Stock Exchange and London Stock Exchange and trades over the counter on the New York Stock Exchange. It also has representative offices in the United Arab Emirates and Ethiopia.