Zenith Bank, Nigeria’s second biggest lender by market value, has received approval from the Competition Authority of Kenya (CAK) to acquire 100 percent of Paramount Bank Limited, clearing a key regulatory hurdle in its East African expansion drive.
In a statement on Thursday, CAK said the transaction is “unlikely to lead to a substantial prevention or lessening of competition in the market for the provision of banking services in Kenya” and would strengthen Paramount’s financial position, helping it meet enhanced core capital requirements over the long term.
The Kenyan regulator noted that the deal poses no risk of reduced competition in the country’s banking sector. Zenith currently has no banking operations in Kenya, while Paramount is a Tier III lender with a modest 0.2 percent market share.
“The approval is based on the Authority’s determination that the transaction is unlikely to harm competition, while any negative public interest concerns regarding employment can be addressed through mitigating remedies,” CAK added.
Paramount met the Central Bank of Kenya’s KSh3.0 billion core capital requirement in November last year, reporting KSh3.118 billion after raising KSh332 million from shareholders, according to Mwango Capital, a Nairobi-based research firm.
The deal reflects a broader shift among banks in East Africa’s largest economy as lenders seek growth opportunities beyond increasingly saturated home markets marked by weak credit expansion, rising regulatory costs, and intense competition.
While several global banks — including Standard Chartered and HSBC — have scaled back African operations over the past decade, Zenith’s move signals confidence in selective regional expansion, particularly in East Africa, where economic growth and financial inclusion trends remain supportive.
The banking group is also widening its continental footprint. Last month, the lender disclosed plans to expand into Ethiopia, Africa’s second most populous country, as it targets generating up to half of its profits outside Nigeria over the medium term.
Historically, Nigeria, the continent most populous nation contributed as much as 90 percent of the bank’s earnings, a dominance that is now gradually easing.
Data cited by The Africa Report show that profit contributions from foreign subsidiaries rose to 27 percent in the first nine months of 2025, up from 14 percent in 2024.
Nigeria’s banking recapitalisation drive is also pushing large lenders such as Zenith to deploy capital beyond their home market. In January 2025, Zenith — which holds an international banking licence — raised N350.4 billion ($242 million), lifting its paid-up capital to N614.6 billion ($425 million).
With higher capital buffers in place, banks are reassessing how best to deploy fresh funds as domestic earnings normalise following two years of windfall gains.
As part of the approval, Zenith has been required to retain Paramount’s 78 employees for at least 12 months after the transaction is completed.
The bank is listed on the Nigerian and London stock exchanges and operates across corporate, commercial, retail, and investment banking. Its international subsidiaries span the United Kingdom, Ghana, Sierra Leone, Gambia, the UAE, and China.
