CBK gives the nod to Oriental Bank buyout, new name

The Central Bank of Kenya (CBK) has given the green light to the acquisition of a 51 per cent stake in the shareholding of Oriental Commercial Bank Ltd by Bank M of Tanzania.

The CBK has also approved change of the bank’s name from Oriental Commercial Bank Ltd to M Oriental Commercial Bank Ltd.

In addition, the CBK said Thursday it had approved an application by M Holdings Ltd to form a non-operating holding company as required by the law.

“The transaction and consequent changes are expected to be completed by September 2016,” said the CBK statement. 

The regulatory approvals now set the stage for Bank M of Tanzania, to become the first Tanzanian lender to enter the Kenyan market after 73 per cent of its shareholders under the M Holdings Group agreed to buy 51 per cent stake in Oriental Commercial Bank.

Oriental Commercial Bank is classified as a small lender by the CBK and was formerly Delphis Bank which grew from the ashes of the globally controversial Pakistani banker BCCI.

READ: Dar owners in Sh1.3bn Oriental deal to change bank name

It was licensed to operate in Kenya in 1991, and was ranked 37th in terms of market share as at 31 December 2015 with nine branches. 
Bank M of Tanzania was licensed in February 2007, and is focused on corporate and investment banking. 
The deal earlier got the nod of the Competition Authority of Kenya, which followed CBK’s initial green light in May last year.
Last year Oriental shareholders approved the allotment of 42,281,893 ordinary shares valued at Sh30 each to M Holdings, valuing the deal at Sh1.27 billion.
The Tanzanian lender has operated with five branches since 2011, and plans to open an additional four this year.