Egypt’s Commercial International Bank (CIB), the largest private sector bank in the country, has completed its acquisition of Mayfair Bank, a small lender based in Kenya, for a total transaction value of $40 million (Sh6.1 billion). The deal, which was approved by the Central Bank of Kenya (CBK) in 2013, gives CIB full ownership of Mayfair Bank, which has six branches in Kenya. The acquisition is part of CIB’s strategy to enter new markets and diversify its income sources, as well as to tap into the trade and investment opportunities between Egypt and Kenya.
CIB, which has a balance sheet of over $25 billion and is cross-listed on the Egypt Stock Exchange and the London Stock Exchange, says it plans to target the growing middle class and the small and medium-sized enterprises (SMEs) in Kenya, by offering them innovative products and services. According to Hussein Abaza, the group chief executive officer of CIB, the bank has about 60,000 SME customers in Egypt, but only 1,000 of them are borrowing, while the rest are relying on cash flow to fund themselves. To address this gap, CIB has launched a special product that allows SMEs to deposit money until 7pm and get credited the same day, with interest on a daily basis. Abaza told Business Daily in Cairo, Egypt, that this product has been very successful in Egypt and the bank hopes to replicate it in Kenya.
CIB leverages its trade advantage with Egypt
CIB also hopes to leverage its trade advantage with Egypt, which is one of Kenya’s major trading partners in Africa. According to the Kenya National Bureau of Statistics (KNBS), Kenya’s exports to Egypt amounted to Sh24.8 billion in 2020, while its imports from Egypt were valued at Sh19.9 billion. CIB says it can facilitate trade finance and cross-border transactions between the two countries, as well as offer competitive exchange rates and remittance services. The bank also says it can support the Kenyan government’s Big Four Agenda, especially in the areas of housing and manufacturing, by sharing its expertise and best practices from Egypt.
CIB turns around Mayfair Bank’s performance
CIB’s entry into Kenya has also resulted in a remarkable turnaround of Mayfair Bank’s performance, which had been making losses for five consecutive years. In 2021, Mayfair CIB reported a net profit of Sh96.1 million ($880.8), compared to a net loss of Sh379.3 million ($3.6 million) in 2020. The bank’s operating income increased by 64 percent to Sh891.45 million ($8.2 million) in 2021, up from Sh544.95 million ($5.1 million) in 2020. The bank attributed the improved results to the increased efficiency, cost management, and customer service that CIB brought to the business.
