FEP pays Sh107m to buy stake in Nyachae majority-owned bank

Fountain Enterprises Programme (FEP) paid Sh107.1 million to acquire a five per cent stake in Credit Bank, the private lender in which the family of former politician Simeon Nyachae has a major stake.

The investment firm disclosed the purchase price in its latest annual report.

“The unquoted investment relate to five per cent shareholding in Credit Bank Limited on December 30, 2015 at a cost of Sh107.1 million,” FEP said in the report.

“The acquisition was part of the group’s plan to acquire 25 per cent shareholding in the bank by December 31, 2016.”

FEP initially intended to acquire a controlling 75 per cent stake in the small lender and it was not immediately clear whether it will raise its interest beyond the 25 per cent targeted by year-end.

Expansion plan

The entry of FEP comes at a time when Credit Bank has embarked on an expansion plan seeking a presence in all the counties where introduction of devolved governments is expanding opportunities for lenders and other businesses.  

The bank yesterday opened a new branch in Meru County and another one in Nairobi.

This brings the total number of outlets opened by the bank to 16, including those located in Nairobi on Koinange Street, Westlands, Lavington and Industrial Area.

“As Credit Bank, we recognise the fact the devolution has brought services closer to the people we intend to open branches in every county so that we can provide solutions to Kenyans in every part of this country,” Chege Thumbi, the bank’s CEO, said in a statement.

Credit Bank’s net profit rose 636.5 per cent to Sh30.2 million in the first quarter ended March compared to Sh4.1 million a year earlier, helped by increased lending.

Its loan book increased to Sh7.2 billion from Sh5.5 billion, with interest income rising to Sh389.4 million from Sh266.1 million.