In 2023, there were six consolidations in the banking sector where four commercial banks and two microfinance banks were either partially or wholly acquired, as the regulator kicks off plans to raise capital requirements for the sector.
- The Commercial International Bank (Egypt) S.A.E. (CIB) acquired 49 percent of the shareholding of Mayfair CIB Bank Limited (MBL) in January 2023.
- After the acquisition, MBL changed its name to Commercial International Bank (CIB) Kenya Limited.
- That same month, Equity Bank Kenya Limited (EBKL) acquired some assets and liabilities of Spire Bank Limited (Spire).
The developments contained in the Bank Supervision Annual Report 2023 comes amid a plan by the government to raise the capital threshold for banks to KSh 10 billion, a 10x increase from the current threshold.
Premier Bank Limited, Somalia (PBLS) acquired 62.5 percent of the shareholding of First Community Bank Limited (FCB) in March 2023, then changed its name to Premier Bank Kenya Limited.
The plan is intended to strengthen the resilience and bank’s capacity to finance large scale projects while creating sufficient capital buffers to absorb and withstand shocks as institutions expand and adopt technology across the board.
Among Microfinance banks, Cactus Cantina Investments Limited (Cactus Cantina) acquired 55.8 percent shareholding of Maisha Microfinance Bank Limited (Maisha MFB) in May, and changed its name to On It Microfinance Bank Limited.
The next month, Shorecap III, LP (Shorecap) acquired 20 percent shareholding of Credit Bank PLC (CBP). Then, in July, HOPE Advancement Inc. (HOPE) acquired 51 percent shareholding of SMEP Microfinance Bank PLC (SMEP MFB).
In 2023, the banking sector registered improved financial strength, demonstrating stability and resilience. The sector’s total capital adequacy ratio stood at 18.6 percent in December 2023 above the minimum ratio of 14.5 percent. Similarly, the sector’s liquidity ratio remained above the statutory minimum level of 20 percent, averaging 51.0 percent.
Further, total net assets registered a notable increase of 16.7 percent from Ksh.6.6 trillion in December 2022 to Ksh.7.7 trillion in December 2023. Customer deposits increased by 18.0 percent from Ksh.5 trillion in December 2022, to Ksh.5.9 trillion in December 2023.
