NAIROBI, Kenya, Mar 21 – Consolidation has continued to categorize the struggling banking sector in Kenya with the new transaction being Diamond Trust Bank (DTB) that is set to acquire Habib Bank.
This is according to the Central Bank of Kenya who says the transaction is subject to regulatory approval in Kenya and Pakistan declining to give the numbers of the deal.
Established in India in 1941, Habib Bank has been operating in Kenya since 1956 when it opened its first branch in Mombasa.
Its Head offices were later moved to Pakistan in 1947.
The bank was ranked 33rd out of 41 banks with a market share of 0.34 percent.
On the other hand, DTB is ranked 6th out of 41 banks with a market share of 6.1 percent as at December 31, 2016 and a network of sixty one branches around the country.
“DTB commenced operations in 1946 as a financial institution. It converted into a fully-fledged commercial bank in 1997 and subsequently merged with Premier Savings and Finance Limited in March 1999,” CBK states.
Among the seven deals include, Mauritian Bank SBM Holdings acquiring 100 per cent stake in Fidelity Commercial Bank, Tanzanian Bank Bank M acquiring 51 per cent of Oriental Commercial Bank, GT Bank acquiring Fina-Bank, Mwalimu SACCO acquiring Equatorial and I&M Holdings acquiring Giro Bank.
Centum investments also acquired 66 per cent stake in Sidian Bank formerly K – Rep Bank while Chicago-based private equity fund Equator Capital Partners LLC, under its ShoreCap II fund bought 15 per cent stake in Jamii Bora Bank.
Analysts continue to see Consolidation as only gathering pace pace going forward, with weaker banks being forced to merge or get acquired.