Nigerian-based lender Zenith Bank intends to acquire Kenya’s Paramount Bank for an undisclosed amount. Zenith, Nigeria’s second-largest bank by total assets, is seeking regulatory approval to expand its footprint into East Africa through the acquisition.
Paramount Bank is a Tier III lender established in 1993 as a non-banking financial institution under the name Combined Finance Ltd. It obtained a commercial banking license in 1995 and began offering full banking services as Paramount Bank Ltd. In 2000, the bank merged with Universal Bank Ltd to form Paramount Universal Bank, but later reverted to the name Paramount Bank Ltd, maintaining its focus on delivering quality, customer-centric banking services.
Since its inception, the bank has achieved several milestones, including expanding its network in Kenya to nine branches nationwide. It has also earned recognition for service quality. In the 2021 Think Business Banking Awards, it was recognized for customer satisfaction and for offering some of the most competitive SME tariffs in the industry.
As of December 2024, Paramount Bank’s profit before tax stood at KES 308 million, while total assets amounted to KES 15.9 billion. Loans and advances rose slightly to KES 9.2 billion, up 2.2% from KES 9.0 billion in December 2023. However, gross non-performing loans grew sharply by 46.3%, rising to KES 1.9 billion from KES 1.3 billion in the previous year.
Paramount Bank Acquisition by Zenith to Boost Core Capital
Zenith Bank’s planned acquisition comes at a time when Kenyan banks are required to raise their minimum core capital in line with the revised capital requirements issued by the Central Bank of Kenya (CBK).
The CBK raised the minimum core capital requirement for commercial banks and mortgage finance institutions from KES 1 billion to KES 10 billion by 2029, a move aimed at strengthening the banking sector’s resilience and ability to sustain growth amid rising risks. The increase will be implemented progressively over five years to give banks sufficient time to mobilize the additional capital. As of December 2024, Paramount Bank’s core capital stood at KES 2.7 billion.
The bank is among 11 lenders at risk of closure by December 2025 if they fail to meet the minimum immediate requirement of KES 3 billion. The other institutions include M-Oriental Commercial Bank Ltd, African Banking Corporation Ltd, Premier Bank Ltd, Commercial International Bank (CIB) Kenya Ltd, Middle East Bank (K) Ltd, Development Bank of Kenya, UBA Kenya Bank Ltd, Credit Bank Ltd, Access Bank Plc, and Consolidated Bank of Kenya.
The acquisition of Paramount Bank by Zenith Bank is expected to strengthen the Kenyan lender’s capital position, putting it on the right track to meeting the KES 10 billion core capital threshold by 2030. The core capital requirements are phased as follows:
December 2025: KES 3 billion
December 2026: KES 5 billion
December 2027: KES 7 billion
December 2028: KES 8 billion
December 2029: KES 10 billion
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