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NEWS & CURRENT AFFAIRS

The Nairobian

Egyptian bank invests Sh3.7b as it gains foothold in Kenya

Business

By Peter Theuri | Apr 27, 2020

Egypt’s leading private lender Commercial International Bank (CIB) will inject Sh3.7 billion ($35 million) as it acquires a 51 per cent stake in Mayfair Bank.

The deal, which was first announced in December when CIB embarked on getting regulatory approval, takes effect from May 1 after the lenders got Central Bank of Kenya approval.

Following the partnership, Mayfair Bank will trade under the name Mayfair CIB Bank Ltd.

CIB, which has a total asset base of about Sh2.5 trillion, will be the first Egyptian bank to set up shop in Kenya.

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Mayfair Bank Chairman Anjay Patel said the partnership is based on the two banks mutually complementing each other through their co-operation.

“Building on the experience and technical know-how of CIB, and leveraging on the local navigation which will be provided by the shareholder base of Mayfair Bank, both partners will be able to build an institution that caters to the needs of large corporates and SMEs in Kenya,” he said.

“Additionally, the bank will act as a bridge between Egypt, Kenya and neighbouring countries, building on the widening trade corridor between them.”

Mayfair Bank was founded three years ago and has five branches in Nairobi, Mombasa and Eldoret. According to Central Bank data, it holds a 0.17 per cent market share.

CIB, which is 45 years old, is listed on Egypt’s Stock Exchange, London Stock Exchange and also traded on the New York Stock Exchange. It intends to expand Mayfair Bank by focusing on the retail segment, corporate banking and trade financing.

“This share subscription will strengthen the bank as the injected funds will be added to the bank’s capital base, and with all existing shareholders continuing in the institution, the bank will be well-positioned to accelerate the shareholders’ growth strategy,” added Mr Patel.

Strengthen ties

Kenya, which has 43 commercial lenders, has seen major deals in the banking sector in the last couple of years, including mergers and takeovers as tough economic times and regulatory requirements force new business strategies.

Mayfair, which was licensed in June 2017, focused on the corporate market segment.

In a statement on the deal between Mayfair and CIB last Friday, the Central Bank said the presence of the Egyptian lender in Kenya “will anchor CIB’s expansion into the East African region.”

“Its entry will also strengthen the trade and investment ties between Kenya and Egypt,” said the regulator.

Kenya predominantly imports sugar, rice and fertiliser from Egypt.