Egypt’s largest private lender, Commercial International Bank (CIB), will inject Sh3.7 billion ($35 million) into Mayfair Bank following its acquisition of a majority stake in the Kenyan tier three lender.
The acquisition by CIB, which now controls 51 percent shareholding in the bank, will see the lender operate under the new name of Mayfair CIB Bank Limited as from May 1.
According to Mayfair Chairman Anjay Patel, the new share subscription will strengthen the bank as the injected funds will be added to the institution’s capital base, and with all existing shareholders continuing in the establishment, the bank will be well-positioned to accelerate the investors’growth strategy.
“The approval by the CBK will pave the way for commencement of operations as Mayfair CIB Bank Limited. The Mayfair Bank-CIB partnership is expected to benefit customers and broaden trade between Kenya and Egypt,” said Mr Patel.
CBK approved the deal on Friday evening, saying the acquisition would diversify and add resilience to the Kenyan banking sector.
“The acquisition of a majority stake in Mayfair will anchor CIB’s expansion into the East African region. Its entry will also strengthen the trade and investment ties between Kenya and Egypt,” CBK said in a statement.
Sunday, Mr Patel pointed out that Mayfair Bank would benefit from CIB’s global experience and technical know-how that will help it to expand its reach.
“Mayfair Bank’s local network and reach is expected to set the foundation for building a world-class institution that caters to the needs and evolving expectations of SMEs and large corporates in Kenya and beyond and towards harnessing intra Africa trade,” he said.
CIB was established in 1975 as a joint venture between National Bank of Egypt and Chase Manhattan Bank. CIB is Egypt’s leading private-sector bank and is listed on the Cairo Stock Exchange, the London Stock Exchange and the New York Stock Exchange.
The lender has a network of over 200 branches in Egypt, two representative offices in Dubai (United Arab Emirates) and Ethiopian capital Addis Ababa. It has a correspondent banking network of more than 200 banks worldwide.
Mayfair is Kenya’s fourth-smallest lender with a market size index of 0.17 percent as at February, according to CBK data.
The bank was licensed in June 2017. Its losses rose 37 percent last year to Sh365.9 million, making it one of the few lenders to post losses in Kenya’s banking market of 43 banks.