Banking milestone: Somalia’s Premier Bank acquires FCB

Nairobi, Kenya (Caasimada Online) – The Central Bank of Kenya (CBK) announced on Friday that Premier Bank Limited, Somalia (PBLS) had acquired 62.5% of shares in First Community Bank Limited (FCB), following approval under section 13(4) of the Banking Act and endorsement by the Cabinet Secretary for the National Treasury. 

CBK expressed its support for the acquisition, stating, “CBK welcomes this transaction that will diversify and strengthen the resilience of the Kenyan banking sector. The acquisition will strengthen the trade and investment ties between Kenya and Somalia.” 

First Community Bank’s challenges and background

First Community Bank, a CBK-licensed institution conducting Sharia-compliant banking business since April 2008, encountered difficulties last year when a bank run occurred, fueled by concerns of potential bankruptcy. The bank attributed the incident to a “system hitch.” 

Operating for nearly 15 years, FCB maintains a network of 18 branches nationwide. According to CBK, the bank is classified as a small bank, with a market share of 0.3% as of December 31, 2022. 

Central Bank of Somalia welcomes the acquisition 

The Central Bank of Somalia praised the acquisition, stating, “Central Bank of Somalia is pleased to welcome the recent 62.5% acquisition of First Community Bank by Premier Bank Limited Somalia. This is a significant achievement demonstrating our banking industry’s growth and innovation.” 

The Somali banking authority also acknowledged the dedication and effort involved in completing the acquisition and expressed optimism for its impact on the sector. 

“We believe that this acquisition will contribute to the stability and growth of our financial system, facilitate trade between Somalia and Kenya, and ultimately benefit the customers and communities that you serve,” the Bank said in statement. 

Premier Bank Limited, Somalia’s profile 

PBLS, now the largest shareholder of First Community Bank, was licensed in 2014 by the Central Bank of Somalia.  

The privately-owned, Shariah-compliant commercial bank operates a network of 20 branches. It provides retail banking services catering to small and medium-sized enterprises (SMEs) and corporates.

This acquisition is poised to bolster the trade and investment ties between Kenya and Somalia, foster stability and growth in the financial sector, and enhance the resilience of the Kenyan banking industry.