Somali lender, Premier Bank, has acquired a 62.5 percent stake in Kenya’s First Community Bank Limited (FCB), the Central Bank of Kenya (CBK) said on Friday.
The CBK said that Premier Bank is the first Somali bank to establish a majority-owned banking subsidiary in Kenya.
“The acquisition will strengthen the trade and investment ties between Kenya and Somalia,” the CBK said in a statement issued in Nairobi, the capital of Kenya.
According to the CBK, Premier Bank’s business model mainly focuses on retail, small and medium-sized enterprises (SMEs) and corporates and is among the large banks in Somalia, accounting for 16 percent of the banking sector assets.
“The CBK welcomes this transaction that will diversify and strengthen the resilience of the Kenyan banking sector,” it said.
The CBK added that FCB was licensed to operate in Kenya in 2008 and is categorized as a small bank with a market share of 0.3 percent as of Dec. 31, 2022.
PBLS, now the largest shareholder of First Community Bank, was licensed in 2014 by the Central Bank of Somalia.
The privately-owned, Shariah-compliant commercial bank operates a network of 20 branches. It provides retail banking services catering to small and medium-sized enterprises (SMEs) and corporates.
This acquisition is poised to bolster the trade and investment ties between Kenya and Somalia, foster stability and growth in the financial sector, and enhance the resilience of the Kenyan banking industry.