The Kenyan Central Bank announced that Commercial International Bank Egypt bought a 51 percent stake in the Kenyan Mayfair Bank.
According to Reuters, the central bank said Mayfair, which started operating in 2017, controls only 0.2 percent of the market and is expected to take advantage of CIB funds and its banking infrastructure to help it grow.
The Kenyan Central Bank said that Commercial International Bank, one of the largest private sector banks in Egypt, has assets of $ 24.18 billion. It is the first Egyptian bank to operate in the Kenyan market.
The central bank said that its entry would also enhance trade and investment relations between Kenya and Egypt.
The banking sector in Kenya has witnessed a series of deals in the past three years after the government set an interest rate cap, damaging the profits of many banks and forcing them to look for ways to maintain profits or continue operating.
The interest rate on lending was removed last November, but lenders did not adjust rates up.
Commercial International Bank Chairman Hisham Ezz Al-Arab told Reuters that the bank had pumped additional capital worth $ 35 million in Mayfair as part of the deal.
"Mayfair is a small bank, but this is our idea for Kenya's development ... a very well-regulated market," the bank said. The deal is part of our expansion in Africa, noting the recent opening of an Ethiopian representative office.
Ezz Al Arab said that CIB intends to expand by focusing on the retail segment, corporate banking, and trade finance. He added that they hope to eventually turn it into a trade finance center in Kenya and neighboring countries.
Mayfair was not immediately available for comment.
But bank executives say Kenya has very many banks, with about forty commercial banks in the country of 47 million. This means a bank for almost every little over a million people, instead of a bank for every two million people, which is the rate they consider most appropriate.
Among the deals that the sector witnessed in the recent crisis are the merger of NIC Bank and the CPA Group to form the NCPA, and the acquisition by the KCB Group of the National Bank of Kenya.
