NAIROBI, Kenya, Sept 3 – Central Bank of Kenya (CBK) has approved the acquisition of National Bank of Kenya (NBK) by Kenya Commercial Bank (KCB).
In a statement, CBK says the acquisition will strengthen the two institutions, leveraging on their respective well established domestic and regional corporate, public sector and retail franchises.
“The acquisition has been granted in accordance with Section 13(1) (e) of the Banking Act,” CBK says.
Some of the conditions outlined in the buyout includes NBK delisting from the Nairobi Securities Exchange, and the conversion of 1,135,000,000 preference shares in the capital of the firm to 1,135,000,000 new ordinary shares.
This will therefore make KCB the largest lender in the region in terms of numbers as well as assets.
Already, KCB is the country’s largest lender by assets. It also owns banking subsidiaries in Uganda, Tanzania, Rwanda, Burundi and South Sudan.
Apart from its banking business, National Bank brings to the table National Insurance Agency, Natbank Trustees and Investment Service Limited.
KCB first pursued NBK earlier this year after the later registered a 98 percent drop in profits from Sh400 million to Sh7 million for the year ended December 2018 as the lender struggled with bad loans.
The NBK buyout comes at a time when Commercial Bank of Africa is in the process of merging with NIC Bank, a deal that has been approved by shareholders of both parties.