KCB to acquire 100pc stake in National Bank of Kenya
- The acquisition, it was announced will be done through an 1:10 ordinary share-swap to end in a 100% control of the lender.
- The Nairobi Securities Exchange (NSE) listed bank has since obtained approval from its board and has since submitted the offer to NBK for consideration.
Kenya Commercial Bank Group has announced plans to acquire National Bank of Kenya (NBK).
The acquisition, it was announced will be done through an 1:10 ordinary share-swap to end in a 100percent control of the lender.
The Nairobi Securities Exchange (NSE) listed bank has since obtained approval from its board and has since submitted the offer to NBK for consideration.
Commenting on the disclosure, KCB Chief Executive Officer Joshua Oigara says the offer sits within the group’s expansion strategy solidifying its already firm position in East Africa’s financial sector.
“The planned acquisition would accelerate the group’s growth ambitions and enhance value to shareholders as it would bring in more assets and scale. It presents an opportunity for more consolidation in Kenya’s banking industry,” he said.
The bank, which has presence in seven of the regional countries further plans on de-listing National Bank from the NSE bourse upon the receipt of 75 percent of the lender’s total shareholding.
KCB sits at the summit of Kenyan tier one lenders having a greater asset value than its closest competitor while National Bank, which is majority owned by the National Social Security Fund (NSSF) sits at the bottom of the tier one pile.
KCB saw its 2018 profits rise by 22 percent to Ksh.24 billion while NBK’s earnings dipped by a staggering 98 percent over the same period.
The acquisition offer backs experts’ expectations for ongoing consolidation in Kenya’s banking sector which currently has over 40 different players under the regulation of the Central Bank of Kenya (CBK).
The acquisition is largely tipped to see larger banks acquire their smaller counterparts as the big-boys in banking seek to maintain a competitive edge and fast-track their growth.
“Increased consolidation in the sector should see the formation of banks that have an adequate capital base, which will provide them with the requisite cover to partake in core banking activities, thereby catalyzing economic growth and development in the country,” noted Cytonn Investments in a note on the banking sector published earlier this year.
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