Kenya’s Paramount Bank has strengthened its financial position ahead of a potential takeover by Nigeria’s Zenith Bank, pushing its core capital above regulatory requirements as consolidation accelerates in the country’s banking sector.
The Nairobi-based lender raised Ksh332 million ($2.55 million) through a rights issue, lifting its total core capital to Ksh3.118 billion ($24.04 million) by the end of September. This marks a steady rise from Ksh2.75 billion ($21.2 million) recorded three months earlier, according to new regulatory disclosures.
The capital injection comes at a crucial point for smaller banks in Kenya, which are under pressure to meet tighter capital standards set by the Central Bank of Kenya. The threshold stands at Ksh3 billion ($23.18 million) this year and will surge to Ksh10 billion ($77.28 million) by 2029, a policy shift that has triggered a wave of mergers and acquisition interest in the lower tier of the market.
Once absorbed, Paramount would give Zenith Bank an active foothold in East Africa’s most competitive banking landscape.
Zenith Bank, founded and chaired by veteran banker Jim Ovia, has already filed an acquisition application with Kenyan authorities as it works to deepen its international footprint. The Lagos-based lender recently raised N350.4 billion ($229.74 million) in fresh capital through a public offering and rights issue, bringing its paid-up capital to N614.65 billion ($402.69 million). That comfortably exceeds Nigeria’s new capital requirement for banks that want to run international operations.
Paramount Bank’s history stretches back to 1993 when it began as Combined Finance Limited before evolving into a commercial bank two years later. Through expansion and a subsequent merger in 2000, it transitioned into its current identity and now operates eight branches including its Nairobi headquarters. Beyond Kenya, Zenith Bank is preparing to open its first branch in Côte d’Ivoire before the year ends, followed by Cameroon. The expansion will give it direct access to high-growth markets and the broader CEMAC monetary region.
Olukayode Akinbinu, Zenith Bank’s head of strategy, said the entry into Abidjan is designed to tap into an economy that has posted an average growth rate of 6.7 percent over the last five years.
Zenith’s planned acquisition and regional push underscores a broader shift among African banks chasing scale, diversified earnings and improved cross-border competitiveness — trends that are quickly reshaping the continent’s financial services landscape.
