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.

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.