Mauritian firm set for Kenya entry with Fidelity Bank buy
Fidelity Bank along Nairobi's Kaunda Street. FILE PHOTO | SAMMY KIMATU
What you need to know:
The deal with SBM, which is listed on the Mauritius Stock Exchange, is pending regulatory approval.
SBM says it will inject Sh1.46 billion in additional capital into Fidelity Bank once the acquisition is complete.
Mauritian financial services group SBM Holdings is set to acquire Kenyan third tier lender Fidelity Commercial Bank by the end of this year, the Central Bank of Kenya (CBK) has disclosed.
Fidelity has been looking to sell an equity stake to a strategic investor in order to bolster its capital base, and had earlier this year announced it was in talks with British PE firm Duet Group looking to sell a stake in the bank.
SBM, which is listed on the Mauritian bourse, says it will inject Sh1.46 billion in additional capital into Fidelity Bank once the acquisition is complete.
The deal with SBM is pending regulatory approval and comes at a time when smaller banks are tipped to consolidate following the capping of interest rates starting September.
“The transaction is expected to be completed by December 31, 2016, and further updates will be provided as the transaction progresses…SBM Group is pursuing an international expansion strategy, and for the African region, it is anchored on Kenya as the entry point for Eastern Africa,” said CBK in a statement Tuesday.
Fidelity began its operations as a non-bank financial institution in 1992 before changing to a commercial bank in 1996.
The lender currently operates 14 branches countrywide.
CBK ranked the bank in position 31 out of 41 banks in market share at the end of 2015, with a share of 0.39 per cent.
SBM Holdings began operations in 1973, with its lines of business including retail and SME banking, wealth management, treasury services, asset Financing, stockbroking and asset management.
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