Diamond Trust Bank is set to acquire small lender Habib Bank for Sh. 1.8 billion.
The acquisition will be done through a share swap, with Habib investors getting additional shares in DTB. Habib investors, who already own 11.97 per cent of DTB, have been offered a 4.75 per cent stake in the Nairobi Securities Exchange-listed firm.
They will now be allotted 13.2 million shares in DTB at a price of Sh. 137.39.
“The transaction will, among others, increase DTB’s market share, enhance its operational leverage and diversify its presence through correspondent relationships in additional geographical areas that include some of the most promising growth frontier markets in Asia within the markets where HBL has operations,” said DTB.
According to the Central Bank of Kenya, Habib’s market share stood at 0.34 per cent last year from 11 branches compared to DTB’s 6.1 per cent from 61 units.
Habib is ranked 33 of Kenya’s 41 banks while DTB is sixth largest.
The acquisition came as DTB announced that it had shrugged off effects of legal caps on lending rates to post a 17 per cent rise in net profit to Sh7.7 billion last year — making it the biggest profit jump among listed lenders so far.
