The Fidelity Commercial Bank Ltd board of directors has approved a deal to sell the lender to Mauritian financial services group SBM Holdings.

The moves paves the way for a share purchase agreement (SPA) to be signed in the near future, in turn allowing requests of the remaining regulatory approvals to be made, CBK said.

“Following SBM Group’s preparedness for the conclusion of the transaction at the earliest, with necessary capital infusion, FCBL held a Board meeting on December 21, 2016 and then an Extraordinary General Meeting of shareholders on December 28, 2016 where the transaction was discussed and approved,” said CBK in a statement.

Fidelity has been looking to sell an equity stake to a strategic investor in order to bolster its capital base.

Under the deal with SBM, which is listed on the Mauritian bourse, the latter says it will inject Sh1.46 billion in additional capital into Fidelity Bank once the acquisition is complete.

CBK said Wednesday that regulatory approvals in both countries would pave way for the completion of the transaction.

“The regulators in both Kenya and Mauritius have also been kept abreast of developments. In light of the progress thus far, it is expected that a Share Purchase Agreement (SPA) will be signed in the near future, which would allow requests of the remaining regulatory approvals to be made. Subject to these approvals, the transaction will then be completed,” CBK added.

Regional debut

The proposed acquisition would mark the entry of SBM into Kenya’s banking sector, using it as springboard into the East African region.

Its banking arm, SBM Bank (Mauritius) Ltd, is one of the leading banks in Mauritius with an international footprint in India, Madagascar, and a representative office in Myanmar.

“The acquisition is in line with SBMH’s regional expansion strategy into East Africa,” SBM said earlier.

SBM Holdings began operations in 1973, with its lines of business including retail and SME banking, wealth management, treasury services, asset Financing, stockbroking and asset management.

SBM Group is expected to bring its experience and expertise from Mauritius and other markets to enhance competitiveness in Kenya’s banking sector.

IMAGE: Fidelity Bank along Nairobi’s Kaunda Street. The proposed acquisition would mark the entry of SBM into Kenya’s banking sector, using it as springboard into the East African region. FILE PHOTO | SAMMY KIMATU

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