Egypt’s Commercial International Bank (CIB) has acquired a 51% stake in Kenya’s Mayfair Bank, the Kenyan central bank said on Friday, the latest in a string of deals in the East African nation’s banking sector.
Kenya’s competition authority had said last year that CIB was looking to buy a controlling stake in Mayfair Bank. The central bank said all necessary approvals had been granted.
Kenya’s banking industry has had a flurry of deals in the last three years after the government capped interest rates, hurting earnings for many banks and forcing them to look for ways to preserve earnings or survive.
The cap on lending rates was removed last November but lenders have not adjusted prices upwards.
Mayfair, which started up in August 2017, controls just 0.2% of the market and is expected to benefit from funds, skills and banking infrastructure from CIB to help it grow, the regulator said.
CIB, one of Egypt’s leading private sector banks, has assets of $24.18 billion, the Kenyan central bank said. It is the first Egyptian bank to venture into the Kenyan market.
“Its entry will also strengthen the trade and investment ties between Kenya and Egypt,” the central bank said.
CIB and Mayfair could not immediately be reached for comment.
Banking executives say Kenya has too many banks, with about 40 commercial lenders in a country 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.