Kenya’s banking industry has been under turmoil since last three years after the government capped interest rates, forcing banks to look for survival strategies. The Kenyan government removed the cap on lending rates last month to boost credit growth. Political observers point out that the country is “over-banked”, with about 40 commercial lenders serving a population of 47 million people. That means, an average one bank serving for over a million people. An appropriate ratio reportedly is one bank per two million people. The situation has led to vigorous survival strategies by the Banks such as the merger of NIC Bank and CBA Group to form NCBA, and the acquisition of National Bank of Kenya by KCB Group. Leading banks such as Equity Group, has gone further ahead, announcing a series of acquisitions in the Democratic Republic of Congo and other African countries this year.
Competition Authority of Kenya in a statement has recently revealed that Egypt’s Commercial International Bank is also exploring the possibility to buy a controlling stake in Mayfair Bank, The Competition Authority of Kenya is examining the Egyptian lender’s proposal to buy the controlling interest in Mayfair Bank. Mayfair, one among Kenya’s smallest banks, started operations in August 2017 and currently has about five outlets and assets of Sh8.2 billion ($80.79 million). Its financial statement for the nine months to the end of September reported a loss of 250 million shillings in that period.
