Mauritius banking group, SBM Holdings Ltd, has ventured into Kenya by fully acquiring Fidelity Commercial Bank.
In a cautionary announcement, SBM Holdings Ltd said it has acquired the entire share capital of Fidelity Bank for Sh100 subject to statutory approval. In turn, it will inject an additional equity of Sh1.455 billion as growth capital.
“The acquisition is in line with SBMH’s regional expansion strategy in East Africa,” it said.
Fidelity Bank, which has been operational for two decades, has a network of 14 branches across Kenya and as of June 2016, the lender had a total balance sheet of Sh12.9 billion.
Here is SBM Holdings’s communique announcing the acquisition:
The Central Bank of Kenya has welcomed the entry of SBM Holdings Ltd into the country, which comes at a time the banking sector is reeling from bad debts, a cap on interest rates and the collapse of two banks – Chase Bank Ltd and Imperial Bank Ltd – in the last few months.
“CBK (Central Bank of Kenya) welcomes the interest of foreign banks that will contribute to the emergence of a world-class financial sector,” it said.
The bank, in a statement, said the transaction is expected to be concluded by December 31, 2016.
CBK Governor Patrick Njoroge is a darling of consolidation efforts, at one time saying small players may be forced into arranged marriages if they are to stay afloat.
Early this year, Fidelity Bank brushed off reports it was about to be placed under statutory management and instead announced a deal with Duet Private Equity that paved the way for injection of Sh1.9 billion into the Bank.
The move strengthened the Bank’s capital base and expansion both locally and in the region as it was bound to grow its capital base to Sh3.8 billion.
The Duet Group, which has its headquarters in the UK, is a global alternative asset management firm with over Sh570 billion (US$5.6 billion) of assets.
