Zenith Bank PLC has secured approval to acquire Paramount Bank Limited after Kenya’s competition regulator found the deal poses no risk to the banking sector.
The Competition Authority of Kenya said Zenith has no existing operations in the country and the transaction will not alter market concentration, approving the deal with employee protection conditions.
In its assessment, the Competition Authority of Kenya said on Thursday that Zenith Bank currently has no presence in the Kenyan market, and as a result, the deal will not alter market concentration.
This finding formed the basis for approving the acquisition, which allows the Nigerian banking group to enter Kenya through the purchase of the locally licensed Paramount Bank.
The approval reflects CAK’s mandate to ensure that mergers and acquisitions do not negatively affect competition, consumer choice, or market stability.
In this case, the regulator concluded that the transaction would not reduce competition or create dominance in Kenya’s banking industry, which is already served by a mix of large multinational banks, regional players, and smaller domestic institutions.
However, the approval was not unconditional. CAK said its clearance is subject to Zenith Bank retaining all 78 employees of Paramount Bank for a minimum period of 12 months following the completion of the transaction.
The condition is intended to protect jobs and provide continuity for staff as the ownership transition takes effect.
The employee retention requirement reaffirms the regulator’s growing emphasis on public interest considerations, particularly employment, in merger approvals.
By requiring Zenith Bank to retain all existing staff for at least a year, CAK aims to cushion workers from immediate job losses that can sometimes accompany acquisitions and restructurings.
Zenith Bank’s acquisition of Paramount Bank marks a strategic entry into Kenya’s financial services market, one of the most developed and competitive in East Africa.
While the regulator noted that Zenith currently has no operations in Kenya, the transaction provides the bank with an established platform, including a customer base, staff, and regulatory licence.
Paramount Bank, though smaller compared to some of Kenya’s tier-one lenders, operates as a fully licensed commercial bank.
Its acquisition by Zenith Bank is expected to bring in new capital, systems, and regional banking experience, although CAK’s decision focused strictly on competition and public interest considerations rather than future business plans.
The Competition Authority of Kenya’s finding that the transaction poses no competition risk highlights the limited impact of the deal on the overall structure of the banking sector.
Since Zenith is entering the market rather than combining with an existing Kenyan operation, the number of competitors remains unchanged, and market shares are not consolidated.
Kenya’s banking sector has seen increased regulatory scrutiny of mergers and acquisitions in recent years, particularly where transactions involve large players or risk reducing competition. In this case, CAK’s assessment concluded that neither scenario applies.
With competition approval now secured, Zenith Bank can proceed to the next stages of completing the acquisition, subject to meeting all other regulatory and legal requirements.
The employee retention condition will remain in force for at least 12 months after completion, after which the bank may review its staffing structure in line with its operational needs and regulatory obligations.
The approval signals regulatory openness to new entrants, provided transactions do not distort competition and include safeguards for workers, reinforcing Kenya’s position as an attractive but closely regulated financial market.
