Peter Kenneth plans new bank in Kenya

NAIROBI, KENYA: Nairobi gubernatorial aspirant Peter Kenneth, one of the shareholders of Mayfair Bank has been allowed to set up a new bank.

He is among 25 shareholders of Mayfair Bank whose opening was approved by the Central Bank of Kenya.

Mr Kenneth is the founder of Mayfair Group, which owns Mayfair Insurance – one of the key shareholders of the proposed Mayfair Bank.
Other investors in the proposed bank are a Nairobi-based lawyer and the wealthy family that owns Grain Bulk Handlers from Mombasa, as the single largest shareholders through Masumin Investments Limited.

Ambrose Rachier, also the chairman of Gor Mahia Football Club, is listed among the 25 shareholders forming the lender that was on Monday given the greenlight by the Central Bank of Kenya.

Official information shows that shareholders Mayfair Bank who are predominantly other limited liability companies have contributed Sh2 billion as capital for the venture.

The bank is linked with Mayfair Insurance – which has 50,000 shares, where Mr Rachier is also a director.
CBK also approved the establishment of a Kenyan subsidiary of Dubai Islamic Bank which has been eyeing the lucrative Kenyan market for years.

Mayfair and DIB are the first lenders to be approved ending a 15-month moratorium issued by CBK boss Patrick Njoroge.

"CBK announces its intention to finalise the processing of license applications for two institutions that had already been granted an "approval in principle", as a first step to lifting the moratorium on licensing of new commercial banks," the banking regulator said in a statement on Monday.

CBK's approval means that the two institutions- DIB Bank Kenya Limited and Mayfair Bank Limited- both in formation will take the remaining steps to finalize their license applications.

Both had been granted approval by principle by CBK before the November 17, 2015 freeze.
Approval by principle means that CBK had given the two a partial endorsement on condition that they meet the set conditions for operating in Kenyan market.

The moratorium had only spared discussions on planned mergers and acquisitions by local or foreign banks. Since then, I&M bank has successfully acquired Giro bank.

DIB Bank Kenya Limited (in formation) is a wholly owned subsidiary of the Dubai Islamic Bank PJSC, a sharia compliant bank from the United Arab Emirates. Mayfair Bank Limited (in formation) is owned by a diverse group of Kenyan investors with interests in various sectors.

If successful, the move will see the number of banks hit 45 from the current 43, amplifying the talk by most analysts that with a population of about 44 million people, Kenya is overbanked.

However CBK said that the move will deepen Kenya's position as financial hub.

"The entry of these banks on the fulfillment of all the pre-licensing conditions will expand the range of banks' business models and underscore Kenya's growing stature as a regional financial services hub," read CBK statement in part.

As at the end of June 2016, 39 commercial banks and one mortgage finance institution were privately owned while the Government holds controlling stakes in the remaining 3 commercial banks. Some 24 of the privately owned banks have their controlling shareholding from Kenya while 15 are foreign owned.

Other financial institutions include 12 microfinance banks, 8 representative offices of foreign banks, 86 foreign exchange bureaus, 14 money remittance providers and 3 credit reference bureaus.