Zenith Bank Acquires Kenyan Lender After Meeting CBN Recapitalisation Target
- Zenith Bank secured approval to acquire Paramount Bank, boosting its East African expansion ambitions
- The regulator said there was no competition risk from the Nigerian firm's entry into Kenya's banking sector
- Acquisition aimed to diversify Zenith’s earnings beyond Nigeria and strengthen Paramount's capital position
Zenith Bank Plc, Nigeria’s second-largest lender by market capitalisation, has secured regulatory approval to acquire 100 per cent of Paramount Bank Limited in Kenya, marking a major step in its East African expansion strategy.
The approval was granted by the Competition Authority of Kenya (CAK), which said the transaction is unlikely to distort competition in the country’s banking sector.
Source: Getty Images
According to the regulator, the acquisition would instead strengthen Paramount Bank’s financial position and enhance its ability to meet Kenya’s rising capital requirements over the long term.
In a statement on Thursday, January 22, CAK noted that Zenith currently has no banking operations in Kenya, while Paramount is a Tier III lender with a relatively small market presence.
Zenith acquires Kenyan bank after regulator clearance
CAK said that its clearance was based on findings that the deal would not lead to a substantial reduction in competition in Kenya’s banking industry.
Paramount Bank controls about 0.2 per cent of total sector assets, while Zenith’s entry is expected to inject fresh capital and operational strength into the lender.
“The Authority has determined that the proposed transaction is unlikely to harm competition in the provision of banking services in Kenya,” CAK said, adding that any potential public interest concerns, particularly around employment, could be addressed through mitigating measures.
As part of the approval conditions, Zenith has been directed to retain all 78 employees of Paramount Bank for at least 12 months after the acquisition is completed.
Paramount meets capital threshold amid Zenith deal
Paramount Bank met the Central Bank of Kenya’s KSh3.0 billion core capital requirement in November 2024 after raising KSh332 million from shareholders.
The bank’s core capital stood at KSh3.118 billion following the capital injection, according to data from Nairobi-based research firm Mwango Capital.
According to BusinessDay, the acquisition positions Paramount to better navigate Kenya’s tightening regulatory environment, where higher capital thresholds are placing pressure on smaller lenders.
Zenith bets on regional growth with acquisition
Zenith’s move has reflected a broader trend among African banks seeking growth outside increasingly saturated domestic markets.
In Kenya and across East Africa, lenders are contending with weak credit growth, rising compliance costs, and intense competition, prompting consolidation and cross-border expansion.
While several global banks, including HSBC and Standard Chartered, have scaled back parts of their African operations over the past decade, Zenith’s expansion signals confidence in selective regional opportunities.
East Africa, in particular, continues to benefit from favourable demographics, economic growth, and improving financial inclusion.
Zenith's Paramount deal is diversification beyond Nigeria
The Kenyan acquisition comes as Zenith accelerates its push to diversify earnings away from Nigeria.
The bank recently disclosed plans to expand into Ethiopia, Africa’s second-most populous country, as it targets generating up to 50 per cent of group profits outside Nigeria over the medium term.
Historically, Nigeria contributed as much as 90 per cent of Zenith’s earnings, with that dominance gradually easing.
Data cited by The Africa Report show that foreign subsidiaries accounted for 27 per cent of group profits in the first nine months of 2025, up from 14 per cent in 2024.
Source: Getty Images
Recapitalisation fuels expansion drive
Nigeria’s ongoing banking recapitalisation programme is also shaping Zenith’s expansion strategy. In January 2025, the lender raised N350.4 billion ($242 million), lifting its paid-up capital to N614.6 billion ($425 million) under its international banking licence.
With stronger capital buffers and domestic earnings normalising after two years of exceptional gains, Zenith and other top-tier Nigerian banks are increasingly looking abroad to deploy fresh funds and sustain long-term growth.
Zenith Bank is listed on the Nigerian and London stock exchanges and operates across corporate, commercial, retail, and investment banking, with international subsidiaries in the UK, Ghana, Sierra Leone, The Gambia, the UAE, and China.
Meet Nigerian banks licensed to operate abroad
Legit.ng earlier reported that Nigeria’s banking industry is undergoing its most ambitious overhaul in more than a decade as the CBN enforces a recapitalisation programme aimed at strengthening financial stability and positioning the sector for the long-term.
Under the policy, commercial banks with international banking licences must raise their minimum paid-up capital to N500 billion by March 31, 2026. The new thresholds, announced in March 2024, mark a notable departure from the existing capital structure.
Proofreading by Bruce Douglas, copy editor at Legit.ng.
Source: Legit.ng
