Kenya: Centum sells its entire stake in Sidian Bank to Nigeria’s Access Bank

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  • Kenya’s Centum Investments has sold its entire equity stake in Sidian Bank Limited to Nigerian lender Access Bank at a cost of $36.7 million 
  • Centum holds 83.4 per cent of the issued shares of Sidian, directly in its own name and indirectly through its wholly-owned subsidiary, Bakki Holdco Limited
  • The two parties said Sidian would eventually be merged with Access Bank’s subsidiary in Kenya to create a stronger banking institution positioned to serve the Kenyan market

Centum Investments has sold its entire equity stake in Sidian Bank Limited to Nigerian lender Access Bank at a cost of $36.7 million.

In a statement, the investment firm, the biggest in East and Central Africa, announced it had entered into a binding agreement with the West African bank.

According to the statement, Centum holds 83.4 per cent of the issued shares of Sidian, directly in its own name and indirectly through its wholly-owned subsidiary, Bakki Holdco Limited.

However, the transaction is subject to customary adjustments agreed by the parties.

“The completion of the transaction is subject to receipt of customary regulatory approvals in Nigeria and Kenya,” the companies said.

As per the agreement,  the two parties said Sidian would eventually be merged with Access Bank’s subsidiary in Kenya to create a stronger banking institution positioned to serve the Kenyan market.

Sidian Bank’s profile

The Kenyan lender has grown its Balance Sheet by over 70 per cent from KSh 19 billion in December 2012 to KSh 30 billion as of March 2022 after Centum’s investment.

Its profitability has also improved since 2019, with a record profit of over KSh 486 million generated in 2021 while ite non-performing loan ratio improved from 20.6 per cent in 2017 to 11.7 per cent as of March 2022, comparing favourably to Kenya’s current national average of 14 per cent.

Commenting on the development, Centum CEO James Mworia, said the transaction advances Centum’s vision to be Africa’s foremost investment channel and bolsters their track record of attracting foreign investors into Kenya and the region to invest in extraordinary enterprises.

“The proceeds from the sale will enable Centum to continue investing across strategic sectors in Kenya and the East African region. We are particularly pleased to be exiting Sidian at a price which represents a 59 per cent premium to the book value and confirms the deep discount embedded in the valuation of the assets in our book,” he said.

At the same time, Acess Bank CEO Roosevelt Ogbonna said the deal builds on their earlier acquisition of the former Transnational Bank Plc (now Access Bank Kenya) and underscores their drive to strengthen their presence in Kenya. He added that Kenya is a key African market that fits into their core strategic focus for geographic earnings growth and diversification.

Centum sales 25% stake in Platinum Credit parent company

KCB merges with Banque Populaire du Rwanda

In a related story, KCB Group PLC recently received regulatory approval from the National Bank of Rwanda (BNR) to merge its newly acquired Banque Populaire du Rwanda (BPR) and KCB Bank Rwanda.

The March 2022 deal paved the way for the two banks to operate as a single entity named BPR Bank Rwanda Plc, with KCB Group as the majority shareholder with effect from 1st April 2022.

According to the parties, the combined bank would become the second-largest bank in the Rwanda banking industry and give KCB Group a stronger edge in deepening the ongoing Group strategy to scale its regional presence.

At the time, former KCB CEO Joshua Oigara, who now sits at the company’s board, said BPR has a lot of potential.

“The success of this business will build on our era of undisputed leadership in the market and contribute towards Rwanda’s economic success journey. I am confident that we can re-write Rwanda’s next chapter of development and economic growth,” said Oigara.

“The success of this integration now allows our customers to enjoy exciting retail and wholesale offerings and the wide branch network is an opportunity for us to roll out products and services to MSMEs and the rural community,” he added.

Subsequently, the BPR Bank Rwanda Plc Board approved a new organisational structure for the integrated entity which takes effect immediately subject to governance approvals obtained from BNR.

“The structure has considered the necessity of smooth post-integration transition with minimal business and human capital disruption whilst retaining key talent resources as well as alignment to the KCB Group Structure for support and governance,” said Oigara.

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Wanjiku Njuguna is a Kenyan-based business reporter with experience of more than eight years.

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