By O’Brien Kimani
Mauritius based lender SBM Holdings has announced plans to acquire local mid-tier lender Fidelity Bank according to regulatory filings.
SBM Holdings will purchase Fidelity’s entire share capital for 100 million shillings and inject an additional equity of 1.5 billion shillings if the deal is approved by Kenyan and Mauritius authorities.
The acquisition is expected to be completed in a month’s time.
Fidelity Bank was in the news last month with social media abuzz with rumors that it was facing financial challenges.
The lender that has been in operation since 1992 is ranked position 31 out of 41 Kenyan banks by market share with 0.39 percent of the market according to the central bank of Kenya.
Currently, the bank has 14 branches in the country and was forced seek a 2 billion shillings cash injection from London based equity firm Duet Private Equity to shore up its capital base in March this year.
Regulatory filings with the Stock Exchange of Mauritius indicate that SBM Bank will purchase the entire shareholding of the Kenyan lender at a cost of 1.5 billion shillings.
The Central Bank of Kenya (CBK) has welcomed the decision by SBM Holdings saying it will contribute to the emergence of a world-class financial sector.
CBK says it expects the transaction to be concluded by end of next month.
SBM Group, which operates SBM Bank, had assets of 420 billion shillings as of September this year.
It also has operations in India and Madagascar and a representative office in Myanmar.