KCB Group shareholders have given a go-ahead to Kenya’s largest lender in terms of assets to buy the National Bank of Kenya through a share swap.
KCB Group, following the approval, will acquire 100 percent of National Bank’s ordinary shares with the transaction being subject to regulations are approval by NBK shareholders.
In its initial offer, KCB had proposed to make the acquisition through a share swap of 10 ordinary shares of NBK for every 1 ordinary share of KCB.
“The proposed transaction will further consolidate the banking sector in Kenya and will create stronger institutions enabling KCB to play a bigger role in the financial inclusion agenda. The acquisition would accelerate the Group’s growth ambitions and enhance value to all stakeholders,” said Mr. Joshua Oigara, the CEO and MD of KCB.
The power in banking in Kenya is unquestionably shifting towards Kenya Commercial Bank (KCB) whose asset base surpasses that of all other banks in the country. It ranks as the first bank in Kenya by assets.
KCB’s full-year results for 2018 showed that its asset base stood at 714.31 billion shillings, a 10.5 percent growth from the 2017/2018 financial year.
The buying of NBK by KCB Group comes after the lender offered to buy Imperial Bank which is currently under receivership. Central Bank of Kenya (CBK), late last year accepted a binding offer from KCB Group for the acquisition of Imperial Bank of Kenya (under Receivership).
This brings the recovery of the total deposit to approximately 20.3 billion shillings. The Kenya Deposit Insurance Corporation (KDIC) was appointed by CBK to assume control of the Imperial Bank in October 2015, following unsound business conditions.
At the date of receivership, Imperial Bank held 58.0 billion shillings in customer deposits with 52,398 deposit accounts and operations in Kenya and Uganda.
The additional 12.7 percent of eligible depositor balances acquired by KCB brings the total recovered sum to approximately 35.0 percent of original eligible deposits held.