Zenith Bank in talks to acquire a tier-two lender in Kenya within the next 3 months

Zenith Bank of Nigeria is in strategic talks to acquire a tier-two lender in the Kenyan market. The move marks Nigeria’s second-largest lender’s first entry into East Africa following the steps of other Nigerian banks who have secured a presence in the region.

According to reports, top Zenith Bank executives are expected to fine-tune talks in Nairobi within the next three months. While Kenya’s banking sector restructures its capital requirement for a stronghold, Zenith Bank is leveraging its firm financial records to secure a foothold in one of Africa’s fast-growing markets.

“We’ve been monitoring the market for a while. The regulatory shift presents the right opening for our Pan-African growth strategy,” said a source familiar with the situation, cited by Techtrends.

Significantly, the deal comes amid Kenya’s overhaul of its capital requirements, with pressures on smaller banks to either raise new funds or consider mergers and acquisitions. The Central Bank of Kenya (CBK) increased minimum core capital from $7.7 million (Ksh1 billion) to $24 million Ksh3 billion by the end of 2025, and plans to increase this to $77 million (Ksh10 billion) by 2029.

In its move to fund the expansion, Zenith Bank, in January, raised around $228 million through a dual rights issue and a public offer that was oversubscribed by 160%. This is also attributed to investors’ confidence and backing for a continental expansion. The fundraising boosted its capital base to $402 million, well above the Central Bank of Nigeria’s $327 million minimum capital requirement, and brought its total assets to $29.6 billion. 

According to the audited financial results for the 2024 financial year filed with the Nigerian Exchange, Zenith Bank recorded a double-digit growth of 86% in gross earnings, increasing from N2.13 trillion in 2023 to N3.97 trillion in 2024. The banking giant also reported N29 trillion in assets and a market cap of N2.3 trillion at the end of 2024. 

Zenith Bank’s profit before tax rose by 67 per cent, reaching N1.3tn in 2024 from N796bn in 2023. This growth was driven by a 138% increase in interest income, supported by investment in high-yield government securities, and growth in the Bank’s loan book.

Also Read: Access Bank gets final approval to acquire National Bank of Kenya.

Zenith Bank’s Kenya entry follows a league of other Nigerian banks

The prospective milestone of Zenith Bank in East Africa’s largest economy represents the growing push of Nigerian Banks in the market.

Over the past five years, United Bank for Africa (UBA) and Guaranty Trust Bank (GTBank), two other Tier 1 Nigerian lenders, have also entered the Kenyan market, representing an increasing regional shift as West African financial institutions seek growth beyond their home markets.

Most recently, Access Bank, Nigeria’s biggest bank, received regulatory approvals from both countries to acquire National Bank of Kenya Limited (NBK) from KCB Group. The Central Bank of Kenya gave its final approval on April 4, 2025, for the transfer of selected NBK assets and liabilities to KCB Bank Kenya Limited under section 9 of the Banking Act.

Analysts have predicted more cross-border acquisitions as the combination of deeper pockets and regulatory pressure is accelerating consolidation in Kenya’s banking sector. They explained that foreign lenders, especially from West Africa with fresh capital raised from a public offering, are viewing the recapitalisation deadline as a pivotal entry point.

In the coming days, smaller Kenyan banks will face a significant decision to shore up capital in line with the CBK’s new recapitalisation framework. According to financial data, 27 of Kenya’s 39 licensed banks have met the 2025 requirement. The remaining 12, mainly tier-two and tier-three lenders with limited branch networks, face growing pressure to recapitalise, merge, or sell.