Friday March 3, 2023
Nairobi (HOL) - The Competition Authority of Kenya (CAK) has given the green light for Somalia's Premier Bank to acquire a 62.5% stake in Kenya's First Community Bank. The acquisition was approved by CAK's Acting Director General, Adano Wario, and announced in the Kenya Gazette on March 3.
First Community Bank, founded by Senior Counsel Ahmednasir Abdullahi, had assets worth Sh24 billion ($188 million) and deposits totalling Sh21.5 billion (168 million) as of June 2022, according to data from the Central Bank of Kenya. The bank was established in 2007 with private investment from Kuwait and was Kenya's first lender to launch full Sharia-compliant financial services. Islamic banking now accounts for more than two percent of the total banking sector in Kenya.
Premier Bank, a privately owned Sharia-compliant commercial bank based in Mogadishu, offers a range of banking services, including retail, business, and corporate banking, mobile and internet banking, ATM banking, SWIFT transfers, and international money transfers. It was licensed by the Central Bank of Somalia in 2014.
The cost of the acquisition has not been disclosed. Moody's, a risk assessment firm, has predicted an increase in bank mergers in Kenya as smaller banks continue to face solvency and liquidity challenges. The Central Bank of Kenya has approved 16 bank mergers since 2000.
In late October, First Community Bank (FCB) experienced a surge of panic withdrawals from customers due to "malicious" rumours that the US government was investigating the bank for receiving illicit COVID funds stolen from Minnesota and laundered into Kenya. Despite the allegations, FCB denied any liquidity crisis.