NAIROBI, KENYA: Kenya’s biggest lender by assets KCB Group has offered to buy 100 per cent of National Bank of Kenya through a share swap consisting of one KCB share for every 10 of National, KCB said in a letter to National Bank on Thursday.
The offer marks the second major deal among lenders since the government capped commercial lending rates in 2016. CBA Group, a privately held bank, is in process of merging with NIC Bank in in a deal which has been approved by shareholders of both parties.
In a statement, NBK said KCB Group served it with a notice of intention to acquire 100 per cent of its ordinary shares in the proposed transaction.
Among the conditions by KCB to NBK for completion of the acquisition, include the latter delisting from the NSE and the conversion of 1,135,000,000 preference shares in the capital of the firm to 1,135,000,000 new ordinary shares.
Another condition to be met in the acqusition is the procurement of regulatory approvals from, amongst others, the Capital Markets Authority, the Central Bank of Kenya, and the Competition Authority of Kenya.
NBK said its board would consider the offer in detail, make consultations, and then seek the necessary approvals from the shareholders and the regulators.
The lender advised its shareholders and the public to exercise due caution when dealing with its shares until further announcements are made.
NSE on Thursday morning had suspended trading in both KCB and National Bank shares, without offering an explanation.
In 2018, National Bank recorded a 98 per cent drop in profit to Sh7 million, up from Sh400 million in the previous year as the lender struggled to recover its bad loans.