Commercial International Bank (CIB) has secured approval from the Central Bank of Egypt (CBE) and the Central Bank of Kenya (CBK) to acquire the remaining 49% stake in Mayfair CIB.
The deal, valued at $40m, will see Mayfair CIB, a Kenya-based lender, become a wholly-owned subsidiary of CBE, which is based in Egypt.
In April 2020, CIB acquired a 51% stake in Mayfair Bank, which began operations in 2017, targeting large and medium-sized firms and high-net-worth individuals.
“The acquisition will anchor CIB’s expansion into the East African region. Additionally, it will strengthen the trade and investment ties between Kenya and Egypt,” the Kenyan central bank said.
The new deal means the Egyptian lender has cumulatively spent $75.35 million (Sh9.38 billion) to acquire the Kenyan bank, which now trades as Mayfair CIB.
The bank has five branches in Nairobi, Eldoret and Mombasa and targets high-net-worth individuals and the corporate market segment. It is categorised as a small bank with a market share of 0.26 percent as of December 2022.
It is associated with politician Peter Kenneth, lawyer Ambrose Rachier and city tycoon Amos Gichuki Ngonjo and accounted for only 0.26 percent of the country’s banking market at Ksh10.2 billion.
CIB has taken full ownership of Mayfair Bank after offering funds, skills and infrastructure to turn around the Kenyan lender from a loss of Ksh 379.2 million (US$ 3,044,560.40 )in 2020 to a profit of Ksh 357.5 million (US$ 2,870,333.18) in the nine months leading to September.
Through the acquisition, CIB became the first Egypt-based lender to enter the Kenyan market and bets on using the operation as the launching pad to the East African market.
The deal was part of CIB’s strategy to expand into the East African region while bolstering trade and investment relations between Kenya and Egypt.
CIB CEO and managing director Hussein Abaza said: “We are pleased and grateful for this vote of confidence from the Governor and CBK as a whole as we are firm believers in the prospect of prosperity of the Kenyan economy and look forward to our contribution to the same.”
Mayfair CIB executive director Hossam Rageh said: “Kenya offers great opportunities, and we are excited to be part of the country’s business life and future. We will grow this bank as we continue to provide a first-class service to all our clients.”
According to CIB, the Kenyan lender reported a significant turnaround in its financial performance last year.
Mayfair CIB’s operating income rose 64% to Ksh 891.45m ($8.2m) in 2021 from Ksh 544.95m ($5.1m) in 2020.
Meanwhile, profits after tax reached KSH96.1m ($880,800) as opposed to a net loss of KSH379.3m ($3.6m) in 2020.
The Egyptian bank has indicated that its strategy for Mayfair CIB will hinge on trade finance activities and digital banking solutions, particularly growing the Egypt-Kenya trade corridor.
CIB, which is the top private bank in Egypt with an asset base of about $19.8 billion (Sh2.46 trillion), wants to support Egyptian large corporates and SMEs to do more business in the Eastern Africa hub.
“Kenya offers great opportunities, and we are excited to be part of the country’s business life and future. We will grow this bank as we continue to provide a first-class service to all our clients,” said Hossam Rageh, executive director at Mayfair CIB.
The Central Bank of Egypt licensed CIB on August 13, 1975.
