Nigerian banks are accelerating their push into Nairobi as rising capital thresholds across Africa force smaller lenders to consolidate, with Zenith Bank Plc’s proposed takeover of Paramount Bank Limited showing how surplus capital raised in Lagos is being redeployed to secure banking licenses in East Africa’s largest financial hub.
The transaction crossed a key hurdle on 22 January 2026, when the Competition Authority of Kenya approved Zenith’s acquisition of 100% of Paramount, subject to employment safeguards.
The clearance removed competition risk from the deal, leaving approval by the Central Bank of Kenya as the final regulatory step before completion.
Paramount is a Tier III lender, ranked 33rd of 39 by market share as of December 2024, with about 0.2% of sector assets.
Kenya has 39 licensed commercial banks.
Market concentration metrics remain unchanged, with a Herfindahl-Hirschman Index of 801.05, classifying the sector as unconcentrated, and a CR4 ratio of 47.3%, considered moderately concentrated. Zenith had no Kenyan banking operations before the transaction, eliminating any direct overlap.
Employment was the only public-interest condition attached to the approval. Zenith must retain 78 Paramount employees for at least 12 months after completion, with exits limited to normal attrition or performance-based processes.
Paramount’s Balance Sheet
The regulatory green light follows a period of tightening capital buffers at Paramount under Kenya’s phased capital reform programme. By September 2025, the lender reported core capital of Sh3.12 billion, up 25.81% from Sh2.48 billion a year earlier and above the Sh3.0 billion minimum required by 31 December 2025. The minimum rises annually through 2029, increasing pressure on smaller banks to raise capital or consolidate.
Paramount’s third-quarter performance illustrates that pressure. For the nine months to September 2025, non-interest income rose 93.07% to Sh279.98 million, lifting operating income 17.09% to Sh754.82 million, even as net interest income fell 4.99% to Sh474.87 million. Higher costs and provisioning offset revenue gains.
Operating expenses increased 31.70% to Sh548.79 million, while loan-loss provisions jumped 260% to Sh144.00 million. Profit before tax fell 9.59% to Sh206.10 million, while profit after tax rose 0.66% to Sh234.75 million. Gross non-performing loans increased 48.34% to Sh2.24 billion.
Lagos’ Forays
Zenith also approaches the deal from a position of strength. In its 2024 annual report, the bank said it launched a hybrid rights issue and public offer in July 2024, seeking ₦290 billion to meet the Central Bank of Nigeria’s ₦500 billion capital requirement.
The offer raised ₦351 billion, achieving 160% subscription, and the bank said the strengthened balance sheet would support expansion across developed and African markets.
The move fits a broader pattern where Nigerian lenders have steadily entered Kenya through greenfield licenses and acquisitions. United Bank for Africa entered in 2009 via a greenfield operation.
Guaranty Trust Bank entered through the acquisition and rebrand of Fina Bank in 2014. Access Bank entered by acquiring Transnational Bank in 2020, then expanded through the purchase of National Bank of Kenya in 2025, while Ecobank operates a Kenyan subsidiary as part of its regional network.
Zenith’s Paramount acquisition follows the same playbook: a newly recapitalised Nigerian bank using acquisition to secure a Kenyan license as local capital rules rise. The remaining question is whether CBK approval and post-deal capital support will keep Paramount ahead of a tightening regulatory bar.
