KCB Announces Plans To Buy Out 100 PC Stake At National Bank

Kenya Commercial Bank is poised to buy 100 percent shares at the National Bank of Kenya (NBK).

The bank proposes a 1:10 ordinary share-swap and has already been approved by KCB board and submitted to NBK for review.

“We KCB Group Plc hereby give notice that we intend to acquire 100 per cent of the ordinary shares with a par value of Ksh5 of NBK. The offer shall be by way of a share swap of 10 ordinary shares of NBK for every one ordinary share of KCB,” KCB board announced in a statement approved by Capital Markets Authority (CMA).

KCB Chief Executive Officer Joshua Oigara says the offer is in a bid to solidify its footing in the East African region.

“The planned acquisition would accelerate the group’s growth ambitions and enhance value to shareholders as it would bring in more assets and scale. It presents an opportunity for more consolidation in Kenya’s banking industry,” he said.

Upon acquiring 75 percent of the stake, KCB plans to de-list NBK fro the Nairobi Stock Exchange (NSE) market.

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The majority stake of the NBK is owned by the National Social Security Fund (NSSF), and is set to relinquish its shares in case the takeover succeeds.

KCB recorded a Ksh24 billion (22 percent rise) while NBK’s profits slumped by 98 percent over the same period.

NBK has been struggling with bad debt amounting to more than Ksh30.1 billion, part of it which it might be forced to write off for non-recovery.

Following the announcement, shares for the two banks seized trading at NSE on Thursday, till full disclosure of the deal.

“NSE wishes to inform investors, shareholders and the general public that we have halted trading of KCB and NBK shares as we await material disclosure from NBK affecting the two counters,” NSE had said in Thursday morning statement.