Zenith Bank clears key hurdle for East Africa expansion

Nigeria’s Zenith Bank Plc, the country’s second-largest lender by market value, has cleared a major regulatory milestone in its push into East Africa. The Competition Authority of Kenya (CAK) has approved the Nigerian bank’s proposed acquisition of 100% of Paramount Bank Limited, a mid-tier Kenyan lender, paving the way for Zenith’s entry into Kenya’s banking market.

In a statement issued on Thursday, the CAK determined that the transaction is “unlikely to lead to a substantial prevention or lessening of competition” in Kenya’s banking sector. Zenith currently has no operations in Kenya, while Paramount holds a modest 0.2% market share as a Tier III institution. The regulator emphasized that the deal will strengthen Paramount’s financial position, enabling it to better meet enhanced core capital requirements in the long term.

To address public interest concerns related to employment, the approval is conditional on Zenith retaining all 78 employees of Paramount Bank for at least 12 months following the completion of the transaction.

The acquisition aligns with a broader trend among African banks seeking diversification amid saturated domestic markets, weak credit growth, rising regulatory costs, and intense competition.

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While several global players, including Standard Chartered and HSBC, have scaled back operations on the continent in recent years, Zenith’s move underscores confidence in selective regional growth, particularly in East Africa, where economic expansion and financial inclusion trends remain promising.

Zenith’s international footprint already includes subsidiaries in the United Kingdom, Ghana, Sierra Leone, Gambia, the UAE, and China, spanning corporate, commercial, retail, and investment banking services. The bank is listed on both the Nigerian and London stock exchanges.

This Kenyan foray is part of Zenith’s ambitious pan-African strategy. Last month, the lender announced plans to expand into Ethiopia, Africa’s second-most populous country, following the liberalization of its banking sector. Zenith aims to generate up to half of its profits from outside Nigeria in the medium term—a significant shift from historical reliance on its home market, which once accounted for as much as 90% of earnings.

Recent data highlights the momentum: profit contributions from foreign subsidiaries rose to 27% in the first nine months of 2025, up from 14% in 2024.

The deal also reflects the impact of Nigeria’s ongoing banking recapitalization drive, which has prompted large lenders like Zenith to deploy excess capital regionally. In January 2025, Zenith raised N350.4 billion ($242 million) through its international banking license, boosting its paid-up capital to N614.6 billion ($425 million).

While the CAK approval removes a key hurdle, the transaction still requires final clearance from the Central Bank of Kenya (CBK) and Nigerian regulators before completion.