Zenith Bank Acquires Kenyan Lender After Meeting CBN Recapitalisation Target
Zenith Bank Plc, Nigeria's second-largest financial institution by market capitalisation, has successfully obtained regulatory clearance to acquire 100 per cent of Paramount Bank Limited in Kenya. This landmark transaction represents a significant milestone in Zenith Bank's strategic expansion into the East African market, following its achievement of the Central Bank of Nigeria's recapitalisation requirements.
Regulatory Approval and Market Impact
The Competition Authority of Kenya granted approval for the acquisition, concluding that the transaction poses no substantial risk to competition within Kenya's banking sector. According to the regulator, Zenith Bank currently maintains no banking operations in Kenya, while Paramount Bank operates as a Tier III lender with a modest market presence, controlling approximately 0.2 per cent of total sector assets.
The CAK emphasised that Zenith's entry into the Kenyan market will instead strengthen Paramount Bank's financial position, enhancing its capacity to meet Kenya's evolving capital requirements over the long term. As part of the approval conditions, Zenith Bank has been directed to retain all 78 employees of Paramount Bank for at least twelve months following the acquisition's completion.
Strategic Expansion and Diversification
This acquisition aligns with Zenith Bank's broader strategy to diversify its earnings away from Nigeria, where historically up to 90 per cent of group profits originated. Under the leadership of CEO Dame Adaora Umeoji, the bank is actively pursuing pan-African growth opportunities, with recent disclosures indicating plans to expand into Ethiopia, Africa's second-most populous nation.
Zenith Bank aims to generate up to 50 per cent of group profits from outside Nigeria within the medium term, reflecting a deliberate shift toward international revenue streams. Data from The Africa Report indicates that foreign subsidiaries already contributed 27 per cent of group profits during the first nine months of 2025, a notable increase from 14 per cent in 2024.
Capital Strengthening and Regional Ambitions
Paramount Bank recently met the Central Bank of Kenya's core capital requirement of KSh3.0 billion in November 2024, following a KSh332 million capital injection from shareholders. This positioned the bank with core capital of KSh3.118 billion, according to data from Nairobi-based research firm Mwango Capital.
Meanwhile, Zenith Bank's expansion drive has been bolstered by Nigeria's ongoing banking recapitalisation programme. In January 2025, the lender raised N350.4 billion, elevating its paid-up capital to N614.6 billion under its international banking licence. This strengthened capital base enables Zenith and other top-tier Nigerian banks to pursue international growth opportunities more aggressively.
Broader Banking Sector Trends
Zenith's acquisition reflects a wider trend among African financial institutions seeking growth beyond increasingly saturated domestic markets. Kenyan and East African banks face multiple challenges including:
- Weak credit growth across the region
- Rising compliance and regulatory costs
- Intense competition within the banking sector
While several global banks have scaled back African operations in recent years, Zenith's expansion demonstrates confidence in selective regional opportunities. East Africa continues to present favourable conditions for banking growth, supported by:
- Positive demographic trends across the region
- Sustained economic growth in key markets
- Improving financial inclusion metrics
The acquisition positions Paramount Bank to better navigate Kenya's tightening regulatory environment, where higher capital thresholds are placing pressure on smaller financial institutions. For Zenith Bank, this transaction represents both a strategic foothold in East Africa and a tangible step toward reducing its historical dependence on the Nigerian market.
Zenith Bank maintains listings on both the Nigerian and London stock exchanges and operates across corporate, commercial, retail, and investment banking segments. The bank's international subsidiaries span multiple countries including the United Kingdom, Ghana, Sierra Leone, The Gambia, the United Arab Emirates, and China.
