The Kenya Commercial Bank (KCB) has expressed an interest to buy out the National Bank of Kenya in a move that could see two largest banks and whose government has a huge stake merging.
The National Bank of Kenya has been through a financial turmoil since the year 2016 when the lender went into losses at a time when the banking sector in the country was on a rocky path. The government, through the National Treasury, is a major shareholder in NBK followed by the National Social Security Fund (NSSF).
Officials from both the National Treasury and the Kenya Commercial Bank have remained silent over the issue choosing though it has been confirmed that KCB has already approached the National Treasury and the National Social Security Fund who are the two major shareholders with a proposal of wanting to buy out NBK.
According to sources within KCB, the lender has the interest to get hold of 70 percent stake of the National Bank but the bank will not pay for the shares in cash but in terms of shares. What this means is that upon acquiring a stake in NBK, the shareholders in NBK will be issued with shares in KCB and will not be paid in cash.
If the transaction will go through, the National Treasury and the NSSF will have a collective ownership of KCB increase from 23.6 percent to 30 percent in a move that is likely to see the Treasury having a bigger say is one of the largest lenders in Kenya and in the region.
KCB has been instrumental in the recovery of Chase Bank after it bailed it out when Chase Bank went under receivership for a period of two weeks. KCB is still operating Chase Bank which has now started giving out loans to its customers.