NAIROBI, Kenya, Sept 6 – It is now official, National Bank will be part of Kenya’s largest lender by assets, Kenya Commercial Bank (KCB), after the Capital Markets Authority gave the go ahead.
This comes a few days after Central Bank of Kenya (CBK) approved the acquisition saying it would strengthen the two institutions.
KCB confirmed that it had received consent to acquire National Bank from shareholders holding 297,130,033 issued ordinary shares out of 338,781,200 issued ordinary shares, representing 87.7 percent by the offer closure date on August 30, 2019.
KCB Group CEO says the next move will be to fully integrate NBK into KCB within the next 24 months.
“We will take several integration decisions including rationalization of our branch network in order to enhance service delivery to our customers. Additionally, we will examine the overall human resource needs to enable efficient business organization” said Oigara.
Oigara added that KCB will work towards streamlining human resources, systems, processes and procedures to fully realize the value of the envisioned combined efficiencies and productivity synergies post the acquisition.
Earlier this week, KCB announced the appointment of Paul Russo as the designate Managing Director of National Bank of Kenya for the transactional 2-year period of integration into KCB.
Russo, who was serving as the Group’s Director of Regional Businesses, has been tasked with leading the transition team that will directly report to the KCB Group Chief Executive Officer and Managing Director Joshua Oigara.
It is expected that the NBK Board will be reorganized and will provide guidance during the integration period.
KCB is now proceeding to complete the transaction as all conditions of the offer have been satisfied (or waived, where legally capable of waiver).
With effect from next week, the NBK shareholders who swapped their shares for those of KCB will be able to freely trade the new stocks at the Nairobi Securities Exchange (NSE).
The condition for the conversion of the non-cumulative preference shares in the share capital of NBK has been met and the conversion and swap of the said shares will occur.
On completion of these processes, KCB will hold 1,432,130,033 ordinary shares comprising 97.17 percent of the total issued share capital of NBK.
KCB will further apply the provisions of the Capital Markets (Take-overs and Mergers) Regulations, 2002 and Part XXIV, Division 4 of the Companies Act to compulsorily acquire the remaining 41,651,167 issued ordinary shares of NBK. Requisite notices in this regard will be sent to all concerned shareholders.
“We are thankful and excited for the goodwill and support we have received from the shareholders, our regulators and all the other stakeholders. This is a good start as we get into full transition,” said Oigara.
With the acquisition, KCB will become the largest lender in the region in terms of numbers as well as assets. The bank 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.