Access Bank gains more ground in Kenya with a $99.6 million NBK deal. The company, Access Bank Group, a big financial services company from Nigeria, might be shelling out around KSh13.2 billion (which is about $99.6 million) to take over a company owned by KCB Group called the National Bank of Kenya (NBK).
Access Bank $99.6 Million NBK Deal
The exact figure of the deal between Access Bank Group and KCB Group’s subsidiary, National Bank of Kenya (NBK), is anticipated to be disclosed upon the conclusion of the deal, expected to happen in the next six to nine months.
According to Paul Russo, the Chief Executive Officer (CEO) of KCB Group, NBK and Access Bank have already entered into a binding agreement. As per the deal, Access Bank will pay 1.25 times the book value of NBK, which stood at around KSh10.57 billion ($79.28 million) as of December 2023, making the deal valued at about KSh13.2 billion ($99.6 million).
The Acquisition Involves Access Bank Acquiring All the Shares of NBK
The acquisition involves Access Bank acquiring all the shares of NBK, subject to regulatory approvals from Kenya and Nigeria.
KCB Group initially acquired NBK, a medium-sized lender under state control, in 2019 through a rescue deal facilitated by the Central Bank of Kenya (CBK). However, despite efforts to turn NBK around and legacy issues resulted in losses. Thus prompting KCB to rethink its investment position due to narrowing capital adequacy ratios in the past two years.
The Announcement of NBK’s Sale
The announcement of NBK’s sale comes amidst a decline in KCB Group’s full-year net profit, which dropped by 8.3% to KSh37.46 billion ($280.95 million) from KSh40.83 billion ($306.23 million).
Following the consolidation of DRC Congo’s Trust Merchant Bank (TMB) into its operations, staff costs at KCB rose by 26% to KSh38.14 billion ($286.05 million). This is so since acquiring an 85% stake for KSh25.1 billion ($188.25 million) in mid-December 2022.
What KCB Group Shareholders Should Expect From This Sale
For the first time in 21 years, KCB Group shareholders won’t receive dividends to preserve capital, especially for KCB Bank Kenya.
Moreover, in January 2024, Access Bank acquired a majority stake in Finance Trust Bank in Uganda, giving the Nigerian lender an 80% ownership stake.
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