Kenya’s largest lender by assets, KCB Group (KCB) has submitted a proposal to the National Treasury and National Social Security Fund (NSSF), that will see it acquire atleast 70 percent stake in National Bank of Kenya (NBK), writes Daily Nation’s Jaindi Kisero.
If the deal is approved by relevant regulatory authorities and shareholders, NBK shareholders will be given a stake in the holding company (KCB Group) rather than be paid cash.
According to the Nation, the proposal also outlines plans to merge the two listed lenders into one large bank, a move that will lead to the “closure of 50 per cent of NBK’s 78 branches” and unknown number of staff will be laid off.
Its worth noting that the National Social Security Fund (NSSF) and the Government of Kenya have a combined shareholding of 70.55 percent in NBK at 48.05 percent and 22.50 percent respectively. On the other hand, the Government owns a 17.53% stake in KCB Group while NSSF holds 6.05 percent in the Bank.
In the proposal, KCB Group will in a later phase “acquire 30 per cent of NBK shares in the hands of the public, with the small shareholders being paid on the same terms as the two principal shareholders. Nobody will be paid in cash.” according to the Nation.
KCB also proposes that 80 to 90 per cent of all Govt deposits, accounts and banking business in other banks will be closed and everything consolidated into a single account at KCB.