KCB Group to sell National Bank of Kenya to Nigeria's Access (updated)
20/03/2024 04:49
(Updates with confirmation, changes source)
By Duncan Miriri
NAIROBI, March 20 (Reuters) - Kenya's KCB Group KCB.NR
has agreed to sell subsidiary National Bank of Kenya (NBK) to
Nigeria's Access Group ACCESSCORP.LG , KCB's chief executive
said on Wednesday.
Paul Russo told an investor briefing the deal was struck at
1.25 times book value, but did not give the exact figure.
"The right thing to do is to accept a binding offer from
Access Group," he said.
KCB Group shares were up 9.9% following news of the deal.
The company, the second-biggest lender in Kenya, bought NBK,
a medium-sized lender that was then controlled by the state, in
a rescue deal engineered by the central bank in 2019.
"Regrettably, some significant legacy pains have eroded all
the gains we have made," KCB Group chairman Joseph Kinyua told
the investor briefing, referring to efforts to turn NBK around.
KCB had initially indicated it was invested in NBK for the
long haul. However, narrowing capital adequacy ratios in the
last two years may have prompted a rethink, said Eric Musau,
head of research at Nairobi-based Standard Investment Bank.
NBK's core capital to risk-weighted asset ratio was 6.9% at
the end of September, below the minimum requirement of 10.5%.
"They would have needed to recapitalise NBK," Musau said,
adding KCB would be able to pay shareholders a return if the
sale is confirmed.
NBK was the only subsidiary in the group, which posted a
drop in revenue last year from 2022, Russo said.
The sale of NBK to Access will allow the investments KCB has
put in the business over the last four years to be preserved,
Russo added.
KCB Group has acquired banks in other markets in the region
in recent years, including an 85% stake in Trust Merchant Bank
in the Democratic of the Congo completed in late 2022, which has
put further pressure on its own reserves.
($1 = 132.0000 Kenyan shillings)
(Reporting by Duncan Miriri; additional reporting by George
Obulutsa; editing by Mark Potter)
((duncan.miriri@thomsonreuters.com; Tel: +254 20 4991239;
Reuters Messaging:
duncan.miriri.thomsonreuters.com@reuters.net))