SBM ready to chase more acquisitions in Kenya

SBM Bank (Kenya). [File, Standard]

SBM Holdings Ltd is keeping its arms open for more deals in Kenya as it looks to strengthen its presence in the market, its chairman has said.

The bank has sealed two acquisitions in the market in one year and Kee Chong Li Kwong Wing has said he expects it to be one of Kenya’s largest lenders within a year.

Last week, SBM sealed a deal that will see it acquire part of Chase Bank Kenya Ltd, which is in receivership

The chairman told Bloomberg that the lender may make further acquisitions in Kenya, where it bought Fidelity Commercial Bank Ltd in May last year.

“We are open to consider further opportunities in Kenya. SBM Holdings has the capability and resources in this regard,” he said.

Increase competition

The purchase, signed off by the Central Bank of Kenya last week, will increase competition among lenders in a market that has seen seven acquisitions happen since 2015.

SBM told Bloomberg in an email from the Mauritian capital, Port Louis, that Chase Bank had a network of more than 60 branches and with assets exceeding $1 billion (Sh100 billion), making its acquisition a landmark transaction.

“This landmark transaction will enable us to grow inorganically, taking SBM Kenya from 31st to 11th place as a strong Top Tier II bank within a year of its creation,” the SBM chairman said.

“The transaction fits with the group’s strategy of having a greater regional presence to take its footprint beyond Mauritius into the Asia-Africa corridor.”

Last year, SBM Holdings said it planned to double its $4.4 billion (Sh440 billion) of assets in the next three years by entering into more markets.

It added that focus would be in East Africa as well as venturing into the West African markets of Nigeria and Ghana from 2020 to add to its operations in India and Madagascar.

In the financial year ended December 31, 2017, SBM Bank (Kenya) posted a loss of Sh330 million, being an improvement from a loss of Sh1.86 billion in the previous financial year. 

Banks are looking forward to the repealing of the interest rate cap law that chief executives have accused of putting a brake on their ability to lend.

[Additional reporting by Patrick Alushula]