Nigeria’s Zenith Bank Plc has received approval from the Competition Authority of Kenya (CAK) to acquire 100% of Paramount Bank Ltd.
The transaction qualifies as a merger under Section 2 and 41 of the Competition Act and meets the KES 1 billion threshold for mandatory notification.
Zenith Bank, which operates in Nigeria, Ghana, Sierra Leone, Gambia, the UK, France, UAE, and China, has no commercial operations in Kenya. CAK stated, “The transaction is unlikely to lead to substantial lessening or prevention of competition in the relevant market.” Paramount Bank ranks 33rd out of 39 licensed banks and holds 0.2% market share.
Market Competition
Post-merger, Zenith will face competition from banks controlling over 99.8% of the market. Kenya’s banking sector remains unconcentrated, with a Herfindahl-Hirschman Index (HHI) of 801.05 and a CR4 ratio of 47.3%.
Employment Safeguards
CAK approved the deal on condition that Zenith retains all 78 Paramount employees for at least 12 months. “All of Paramount Bank’s employees will be retained under their current terms,” the Authority confirmed.
Paramount’s Subsidiaries
Paramount Bank controls two subsidiaries: Paramount Bancassurance Intermediary Ltd and PB Capital Ltd. The parties submitted that the acquisition aims to strengthen Paramount’s financial position, ensure compliance with core capital requirements, and reduce reliance on shareholder support.
Nedbank’s Tender Offer for NCBA
Separately, South Africa’s Nedbank Group launched a KES 110.39 billion tender offer for up to 66% of NCBA Group. Nedbank secured commitments from 71.2% of shareholders. The bank plans to retain NCBA’s brand, management, and operations across East Africa.
NCBA’s CEO said the partnership could enhance lending, digital banking, and wealth management. Both transactions await final approval from the Central Bank of Kenya.
Sector Overview
Kenya’s banking sector includes nine Tier I banks, nine Tier II banks, and 21 Tier III banks. Tier I banks hold 75.6% of market share, led by KCB Bank Kenya Ltd (16.6%), Equity Bank Kenya Ltd (12.8%), Co-operative Bank of Kenya Ltd (9.6%), and NCBA Bank Kenya PLC (8.3%).
