AfricInvest and Catalyst Principal Partners acquires 24.2pct stake in Prime Bank

Tunisia’s AfricInvest and Kenya’s Catalyst Principal Partners have acquired a 24.2% minority stake in Prime Bank through a capital injection of KSh5.1bn.

The two firms joined to form a special purpose vehicle dubbed AfricInvest Azure in order to enter the deal.

The acquisition has valued Prime Bank at KSh21.1bn.

“Prime Bank welcomes this new partnership with AfricInvest and Catalyst, which further strengthens our capital base in order to carry out strategic plans which include … expanding locally and regionally,” Bharat Jani, Managing Director at Prime Bank, revealed in a statement.

According to Cytonn Investments, “This will be the first bank acquisition in 2019 and will be in line with our expectation of consolidation in the Kenya banking sector following the enactment of the Banking (Amendment) Act, 2015 and the fact that Kenya is overbanked.”

“This is a further case of attractiveness in the financial services sector in Kenya with private equity firms looking to increase investments into the sector through acquisitions,” they add.

Prime Bank is a Tier II bank founded in 1992 has an overall market share of 2.0% according to the Central Bank of Kenya’s Annual Supervisory Report, 2017, and has 1.9% of total deposits in the banking industry.

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“As at Prime Bank’s last reporting in Q3’2018, the bank had a book value of Kshs 21.2 bn, As such, the transaction is being carried out at a price-to-book value (P/Bv) of 1.0x, which is a 23.6% discount to the market’s current trading valuation of 1.3x P/Bv for listed Kenyan banks.” – Cytonn.