SBM Holdings, owner of Mauritius’s second-biggest bank, said it expects to be one of Kenya’s largest lenders within a year after acquiring part of Chase Bank, while remaining open to more deals in the country, Bloomberg reports.
The purchase, signed off by Central Bank of Kenya last week, will increase competition among lenders in East Africa’s biggest economy, where there have been seven acquisitions since 2015. Chase has a network of more than 60 branches with assets exceeding Ksh 10 billion ($1 billion), SBM said in a statement emailed Monday from the Mauritian capital, Port Louis.
“This landmark transaction will enable us to grow inorganically, taking SBM Kenya from 31st to 11th place as a strong Top Tier II bank within a year of its creation,” SBM Chairman Kee Chong Li Kwong Wing said in the statement. The transaction fits with the group’s strategy of having a greater regional presence to take “its footprint beyond Mauritius into the Asia-Africa corridor,” he told Bloomberg.
SBM said last year it plans to double its Ksh 440 billion ($4.4 billion) of assets in the next three years by entering into more markets in East Africa and venturing into the West African markets of Nigeria and Ghana from 2020, adding to its operations in India and Madagascar.
The lender may make further acquisitions in Kenya, where it bought Fidelity Commercial Bank Ltd. in
May last year, Li Kwong Wing said by phone Monday from Nairobi.
“We are open to consider further opportunities in Kenya,” he said. “SBM Holdings has the capability and resources in this regard.”
Chase Bank has been operating partially since April 2016, after it was re-opened under KCB receiver management.
SBM already has operations in Kenya after it acquired Fidelity Bank in 2016 with the expansion through Chase Bank aimed at tapping its growing its presence in the market.
“Through this acquisition, and combined with its other operations in Kenya, SBM will bring its experience and expertise from Mauritius and other markets, to further enhance the competitiveness and resilience of Kenya’s banking sector,” the statement reads.
Chase Bank was placed under receivership in April 2016 following a run on deposits after reports of liquidity problems.
According to Kenya Depositors Insurance Corporation (KDIC), SBM will also be required to retain a majority of the Chase Bank staff and branches.
