The bank’s Chief Executive Jeremy Awori says the opportunities however need to make financial sense/FILE
NAIROBI, Kenya, Jul 15 – Barclays Bank of Kenya (BBK) says its open for acquisition and merger opportunities as consolidation looms in the banking sector.
The bank’s Chief Executive Jeremy Awori says the opportunities however need to make financial sense.
The tier one bank has been in Kenya for 100 years and is facing fierce competition from local players.
“If you look at acquisitions globally a lot of them can be challenging in terms of whether they are value accretive over the long run; you have to pay a price and integrate those entities, their cultural issues, their technology issues, so we will always look at those very carefully before making any decision,” Awori stated.
The bank is facing the imminent exit of Barclays Bank PLC from Africa.
Barclays Bank PLC started selling part of its stake in the Barclays Africa Group in May 2016.
The global financial institution placed 103.5 million shares up for sale representing 12.2 percent, essentially cutting its shareholding in the group from 62.3 percent to 50.1 percent.
Foreign banks are struggling to adapt to African dynamics hence losing market to local banks which understand the market.
Treasury Cabinet Secretary Henry Rotich has been urging banks to consolidate rather than to compete for small markets.
Rotich is set to reintroduce the rejected proposal by the National Assembly to increase the minimum core capital for banks to Sh5 billion from the current Sh1 billion in the current financial year.
The consolidation loom has seen I&M Bank acquire Giro Commercial Bank at Sh5.09 billion while Tanzania’s Bank M acquired 51 percent stake in Oriental Commercial bank.
Spire Bank (former Equatorial Commercial Bank) was acquired by Mwalimu Sacco.
“Market forces will dictate the pace and extent of consolidation, we are all for a stable banking industry that customers and clients can have faith in, we have seen the efforts of the Central Bank of Kenya (CBK) Governor in making sure that the regulation is followed and the governance is sound. It will come to a point where some banks will say it makes sense for them to either merge or allow larger players to consolidate their positions by taking them on,” Awori observed.
Awori was speaking on Friday during the official launch of SheTradesKe, a partnership initiative between BBK and International Trade Centre (ITC) aimed at equipping 10,000 local women entrepreneurs with new skills and connect them to international trade opportunities by 2020.
The SheTrades initiative was launched by ITC in 2015 with the objective of connecting one million women entrepreneurs from around the world to global markets in the next five years.
In Kenya, the initiative will operate under the banner SheTradesKe and will be implemented in cooperation with Barclays Kenya and other partners.
Through the partnership, Barclays will leverage its expertise in financial services while ITC will employ its experience in business development to offer local women entrepreneurs support in critical areas, including financial management, in order to help them create and maintain links to international markets.
