NAIROBI, Kenya, Jan 22 – Nigeria’s Zenith Bank PLC has received regulatory approval to acquire 100 percent of Paramount Bank Limited, paving the way for the Tier 1 lender’s entry into the East African market.
The Competition Authority of Kenya (CAK) said the transaction does not raise competition concerns in the banking sector, but attached conditions aimed at protecting jobs. Under the approval, Zenith is barred from undertaking immediate staff layoffs as part of the post-acquisition integration.
The deal marks the first major bank acquisition of 2026 and comes amid tighter capital requirements imposed by the Central Bank of Kenya (CBK). Banks are required to raise core capital to Sh10 billion by 2029, up from the current Sh1 billion, a move that has increased pressure on smaller lenders to seek strategic investors.
Paramount Bank, a Tier 3 lender ranked 33rd in the market with about 0.2 percent market share, met the interim Sh3 billion capital threshold by the end of 2025. However, the long-term Sh10 billion requirement made it increasingly difficult for the bank to remain competitive on its own.
For Zenith Bank, which is listed on the Nigerian and London stock exchanges, the acquisition expands its footprint beyond West Africa and existing international operations in the UK, UAE and China.
The deal also includes Paramount’s subsidiaries—Paramount Bancassurance Intermediary Limited and PB Capital Limited—giving Zenith an immediate presence in insurance and investment services.
Zenith now joins other Nigerian lenders already operating in Kenya, including Access Bank, United Bank for Africa (UBA) and Guaranty Trust Bank (GTBank). The growing presence suggests Kenya is becoming a strategic hub for Nigerian banks seeking pan-African expansion rather than a peripheral diversification market.
Industry analysts say the acquisition underscores the growing consolidation of Kenya’s banking sector, particularly among family-owned and niche Tier 3 banks. Paramount, which has focused largely on SME lending, is expected to undergo operational changes as Zenith deploys its stronger capital base, digital platforms and corporate banking expertise.
The CAK said its approval sets a precedent for future mergers and acquisitions, signalling support for consolidation to strengthen financial stability, while maintaining safeguards to cushion workers from the immediate impact of bank mergers.
