M Oriental targets family businesses, as new owners take charge

Oriental Commercial Bank has re-branded to M Oriental following its acquisition by Tanzanian lender Bank M.

The Tanzanian bank, the first to operate in Kenya, acquired a 51 percent stake in the small seized lender and is looking to niche banking to grow.

The new shareholders are eying business from family owned companies, arguing it provides a unique banking opportunity, currently untapped in Kenya.

“We are repositioning into a wholesale bank offering innovative services and products,” M-Holdings Group chief executive Sanjeev Kumar said during the launch.

The entry of Bank M into the country marks the first significant admission of a Tanzanian bank into the Kenyan competitive local banking industry. It’s ranked as one of the 10 banks in Tanzania.

Bank M bought 50 million shares created by Oriental’s shareholders at a price estimated at Sh1.3 billion.

“The banking sector in Kenya is dominated by universal banking models and currently no other bank is operating exclusively in the wholesale Banking space,” Mr Sanjeev said of the new strategy.

M Oriental will eventually branch out to retail banking once the new business model stabilizes.

M Oriental posted a profit of Sh43 million in 2015 with customer deposits of Sh6.2 billion. The new owners will be keen to grow the loan book which at the end of 2015 stood at Sh5.2 billion.

Report by Karen Mwaniki