CBK Approves Acquisition of First Community Bank by Somalia Lender

Following approval from the Central Bank of Kenya (CBK), Premier Bank Limited of Somalia will finish buying a 62.5 percent share in First Community Bank later this month.

The merging of the two banks received earlier approval from Kenya’s Competition Authority (CAK). The deal will be completed on March 27.

“The Central Bank of Kenya (CBK) announces the acquisition of 62.5 percent of the shareholding of First Community Bank Limited (FCB) by Premier Bank Limited, Somalia (PBLS) effective March 27, 2023,” CBK said in a statement on Friday.

“This follows CBK’s approval on March 13, 2023, under Section 13(4) of the Banking Act and approval by the Cabinet Secretary for the National Treasury and Planning on March 16, 2023, pursuant to Section 9(1) of the Banking Act,” it added.

Third-tier lender FCB, which had Sh22.2 billion in deposits as of June of last year, was placed 27th among Kenya’s 39 banks with a 0.38 percent market share.

Premier Bank is a privately owned commercial bank that complies with Sharia law that was established in Somalia in 2013 and granted a license by the Central Bank of Somalia in 2014. 

The Somalia lender provides personal, business, and corporate banking services as well as ATM, mobile, and internet banking, SWIFT, and international money transfers.

Almost 600 point-of-sale merchants, 80 ATMs, and 20 branches make up the Somalia bank. It is one of Somalia’s major banks, making up 16% of the country’s total financial assets.

Under the agreement, Premier Bank becomes the first bank in Somalia to create a banking subsidiary that is majority-owned in Kenya.

“The acquisition will strengthen the trade and investment ties between Kenya and Somalia. CBK welcomes this transaction that will diversify and strengthen the resilience of the Kenyan banking sector,” said CBK.

Premier Bank’s acquisition of FCB comes just two months after the Central Bank of Kenya’s approval of Commercial International Bank’s acquisition of Kenya’s Mayfair Bank, the country’s largest private sector bank, on January 23. (CIB).

CIB acquired the remaining 49% of Mayfair’s shares to complete the takeover. In 2020, it had previously acquired 51% of the shares.

Five branches of MBL, which began operations in August 2017, are located in Nairobi, Eldoret, and Mombasa.

The Cairo-based company was the first Egyptian bank to open an office in Kenya after the Mayfair buyout.

With roughly Sh3.09 trillion ($24.18 billion) in total assets, CIB is the top private sector bank in Egypt.

It trades over the counter on the New York Stock Exchange and is listed on the Egyptian Stock Exchange and the London Stock Exchange. Moreover, it maintains representational offices in Ethiopia and the United Arab Emirates.