KCB And National Bank Won’t Merge To Become One Entity

KCB Group will no longer be merging with National Bank of Kenya to become one entity as had earlier been planned.

After acquiring 100 percent of National Bank through a share swap, Kenya Commercial Bank Group was planning to fully integrate NBK, erasing its brand from the Kenyan market.

Shareholders in NBK exchanged their shares with KCB Group at the rate of 10 shares in NBK with 1 share in KCB.

The decision not to merge NBK with KCB Group has been informed with the fear that by doing so, KCB Group might lose the loyal clients affiliated to NBK.

“The two entities have different competencies and propositions. We will go back to the regulator about the model. Closing the brand comes with downsides because it is not automatic all customers will remain,” said Mr. Paul Ruso, the MD of NBK tasked with managing the transition.

National Bank of Kenya had been going through financial turmoil by making numerous losses prompting shareholders to opt for a way out through either selling it or merging it with KCB Group.

In September 2019, the NBK deposits dropped to 82.5 billion shillings from 91.3 billion shillings in June 2019.

Employees affiliated to National Bank were a worried lot because the Competition Authority of Kenya had given KCB Group to retain 90 percent of the workers for only one and a half years.

News that NBK is going to continue operating as an independent entity comes as a reprieve to employees who were worried about their jobs.

Kenya Commercial Bank remains the largest bank in asset base in Kenya and was seen as the only life for the ailing National Bank.

The future of the banking sector.

The future of the banking sector in Kenya is “bright” given the fact that parliament dropped the interest rate cap, giving banks the freedom to set their own interest rate on loans.

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