The Kenya Commercial Bank (KCB) has been been given green light by the Central Bank of Kenya (CBK) to acquire 100 percent stake at the troubled National Bank of Kenya (NBK).
This comes at a time the deal has received a nod from shareholders and the Capital Markets Authority (CMA), and a green light from CBK was the only obstacle.
“The acquisition will strengthen both institutions leveraging on their respective well-established domestic and regional corporate, public sector and retail franchises,” read CBK’s approval statement.
KCB Group is set to take over National Bank of Kenya through a share swap. Those with shares in NBK had until last Friday to swap their shares with shares in KCB Group. 10 shares in NBK gave one 1 share in the new merger.
KCB got support of a majority 77.6 percent share stake or an equivalent 263 million shares of NBK.
The merger will see KCB increase its asset base to Ksh828 billion, becoming the largest bank in the country.
KCB is expected to disclose the offer results on September 13 ahead of the accreditation and listing of the transferred shares at the end of September.
KCB is also planning to inject a Ksh7.5 billion capital to revive the dwindling fortunes. Bad loans for the bank have risen from Ksh7.2 billion in 2014 to the current 31.4 billion.
NBK was initially fully owned by the government since its inception in 1968, but the government has shed its stake to the current 22.5 percent.
NBK’s management has been accused of mismanagement and collusion with defaulters to forfeit the loans, which has run down the bank.