A branch of Commercial International Bank (CIB) is pictured in Cairo, Egypt July 30, 2017. Picture taken July 30, 2017. REUTERS/Mohamed Abd El Ghany Egypt’s largest private bank, Commercial International Bank (CIB), acquired a majority stake in a Kenyan bank on Friday, gaining a foothold in Nairobi.
The Central Bank of Kenya (CBK) announced that CIB had acquired 51% of Mayfair Bank – one of the youngest banks in the country – at $35.35m. “ CIB is the first Egyptian bank to establish a presence in Kenya,” the regulator said, adding it would “anchor CIB’s expansion in East Africa”, and “strengthen the trade and investment ties between Kenya and Egypt.” Mayfair Bank was established in 2017 after the regulator lifted a moratorium on new banking licenses. It counts among its owners a former presidential candidate, Peter Kenneth, who last ran for governor of the capital in 2017.
Although CIB is based in Egypt, its biggest shareholder is Fairfax Financial Holdings, a Canadian holdings company headed by Prem Watsa, known as the “Canadian Warren Buffet”.
Kenya’s Mayfair Bank
The three-year-old Mayfair Bank was one of the youngest and smallest banks in Kenya, with an estimated market share of 0.17%.
Although far smaller than most other lenders in the country, it had positioned itself as a niche bank, providing financial services to high-net worth individuals and corporates.
Since the rapid collapse of three banks in the mid-2010s, Kenya’s banking regulator has been pushing for reorganization. Under the directives of the Central Bank of Kenya’s Governor Patrick Njoroge, CBK stopped issuing new banking licenses, lobbied for the removal of rate caps, and pushed for stronger banking practices and market reorganisation. In February, the regulator said the banking sector had become insensitive to “to the needs of Kenyans through high cost of credit, opaqueness and poor customer care” pushing banks to “diversify the business models, and enhance stability.”
Influence of CIB
CIB’s presence will drive up competition, as Nairobi’s financial services face mixed fortunes.
Hisham Ezz Al Arab, Chairman and Managing Director of CIB, said the purchase was part of the bank’s strategy to expand in Africa. This strategy is based on a confidence of the continent’s growing promises and opportunities.
Ezz Al Arab said the CIB’s acquisition of Mayfair Bank complements its expansion plans across Africa. CIB is looking to take further advantage of regional and continental integration and supports intra-regional trade. READ MORE: Free trade area […]