KCB Group CEO Paul Russo has confirmed that the regional lender is in the process of selling its struggling subsidiary National Bank to Nigerian lender Access Bank.
- KCB will sell 100% of NBK at 1.25* its book value, which Russo said was made possible by KCB’s turnaround strategy over the last four years.
- Access Bank already has a foothold in Kenya after it acquired Transnational Bank in 2019.
- Access Bank has been on a M&As streak across the continent, acquiring Grobank in South Africa, BancABC in Botswana and Mozambique, Diamond Bank in Nigeria, and Finibanco Angola.
“The board evaluated three options and made the decision that to protect the value and the efforts we’ve put in NBK, the right thing to do [] is to accept a binding offer from Access Group,” Russo said while releasing KCB Group’s 2023 financial results.
Access Bank first sought to acquire Sidian Bank from Centum Investments and merge it with Access Bank Kenya, which would have raised its total assets in Kenya to Kshs. 57.1 bn. After negotiations failed in early 2023, Access Bank said that it would continue “to explore a variety of organic and inorganic opportunities to grow its market share…” in Kenya.
“Subsequent to the completion of the transaction, NBK will be combined with Access Bank Kenya PLC to create an enlarged franchise in the pursuit of our strategic objective for the Kenyan and East African markets,” Roosevelt Ogbonna, MD and CEO of Access Bank PLC said in a statement.
KCB Group acquired NBK five years ago, and has since struggled to fix the many issues it inherited, including significant capital constraints and non-performing loans.
- Media reports on Wednesday indicated that KCB has entered into a deal to sell the struggling subsidiary after notifying industry regulator, the Central Bank of Kenya.
- News of the deal drove KCB Group shares up in Wednesday’s trading, rising by 7% within the first three hours of trading.
- KCB shares are traded in the Nairobi, Uganda, Rwanda, and Dar es Salaam bourses.
“Over the past four years, we have made many progressive investments in National Bank,” KCB Board Chair Joseph Kinyua said, “Regrettably, some significant legacy claims have eroded the all the gains we have made.”
According to KCB, the deal will take six to nine months to complete. In addition to CBK’s and the Central Bank of Nigeria’s nod, the deal will also require the approval of the Competition Authority of Kenya (CAK) and the COMESA Competition Commission.
