Banking: Nigeria’s Zenith Bank enters Kenya with Paramount takeover

Nigeria’s second-largest lender, Zenith Bank, has been cleared to enter the Kenyan market after regulators approved its 100% acquisition of the local firm Paramount Bank.

The deal, confirmed by the Competition Authority of Kenya (CAK) on Thursday, marks Zenith’s first footprint in East Africa’s largest economy. The Nigerian Tier-1 giant already has a presence in Ghana, the UK, the UAE, and China.

While the financial terms of the deal were not made public, the regulator has imposed a strict “job-security” clause: Zenith must retain all of Paramount’s current staff for at least one year.

Strengthening a ‘small player’

Paramount Bank is currently a small player in Kenya’s crowded banking sector, ranked 33rd out of 39 licensed lenders.

Regulators say the takeover will provide a much-needed lifeline for the bank, helping it to:

• Meet capital rules: Comply with the Central Bank of Kenya’s stricter core capital requirements.
• End cash calls: Reduce the bank’s constant reliance on emergency cash injections from its shareholders.
• Boost competition: Use Zenith’s deep pockets to compete in a market increasingly dominated by digital and mobile banking.

No threat to competition

The CAK ruled that the merger would not harm the local market because Zenith currently has no existing operations in Kenya.

“The transaction is unlikely to negatively impact competition,” the authority stated, noting that the Kenyan banking landscape remains highly competitive and is shifting away from physical branches toward agency and mobile platforms.

Nigeria’s ‘Big Banks’ go continental

Zenith’s move into Kenya follows a growing trend of Nigerian financial institutions expanding across the continent. Its biggest rival, Access Bank, has already made significant acquisitions in Kenya and South Africa as Nigerian banks seek to diversify their income away from the volatile naira.

Zenith, which is listed on both the Nigerian and London stock exchanges, brings a massive balance sheet to the deal, specializing in corporate banking, wealth management, and trade finance.