How Cross-Border Acquisitions are Reshaping Kenya’s Banking Sector

By Linet Amuli - Reporter

Kenya, 23 January 2026 - The East African financial sector is witnessing a surge in regional banking consolidation and expansion as foreign institutions increase their presence in key markets.

The recent acquisition of Paramount Bank by Nigerian banking giant Zenith Bank Plc, approved by the Competition Authority of Kenya (CAK), underscores this shift, signalling growing investor interest in the region’s banking landscape.

Under the CAK’s clearance, the acquiring bank will take full control of Paramount Bank, a Tier III lender ranked 33rd in Kenya’s banking sector.

The regulator noted that the transaction is unlikely to affect competition materially, as most market share remains with larger domestic and international banks. The approval also includes a condition to retain Paramount’s workforce for at least 12 months following completion, ensuring operational continuity.

Paramount’s takeover reflects broader sector dynamics, particularly as smaller banks face increasing pressure to meet enhanced capital requirements set by the Central Bank of Kenya (CBK). Banks must now achieve a minimum core capital of Sh10 billion by 2029, a threshold that has encouraged consolidation and strategic partnerships among mid tier institutions.

The Paramount deal is part of a widening trend of West African banks extending beyond their traditional markets. Access Bank Plc, for example, completed the acquisition of National Bank of Kenya (NBK) in May 2025, taking full ownership of the mid-sized lender and substantially increasing its footprint in East Africa. NBK’s wide network of branches across Kenya has given Access Bank a stronger commercial presence and a platform for further growth.

Other Nigerian lenders, including United Bank for Africa (UBA) and Guaranty Trust Bank (GTBank), already operate in Kenya, making the market an important hub for pan-African banking strategies. The growing number of cross-border deals suggests that regional investors see East Africa as a high-potential growth area due to its vibrant economy, expanding consumer base, and role as a trade gateway.

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Foreign expansion is not limited to West African players. South Africa’s Nedbank Group announced plans to acquire a majority stake in NCBA Group, one of Kenya’s largest financial services firms. This proposed deal, valued at roughly $856 million, would deepen Nedbank’s presence in East Africa while leveraging NCBA’s extensive regional network.

These acquisitions are reshaping the East African banking landscape, bringing in additional capital, technology, and competition. For regional customers, this could translate into broader financial products, more competitive lending rates, and enhanced service delivery. At the same time, the trend highlights the increasing interconnectedness of African banking markets and the importance of harmonized regulatory frameworks to support sustainable growth.