KCB Group is set to sell NBK, the National Bank of Kenya, to Access Bank Nigeria, following a binding deal signed on Wednesday, 20 March 2024, in Nairobi, Kenya’s capital city.
This transaction will cost Access Bank 1.25 times the book value. When the exact value is yet to be made public, it is said to be completed within the next 6-9 months. However, the acquisition’s success depends on regulatory approvals from Kenya, Nigeria, the COMESA Competition Commission, and other relevant regulators.
In 2020, Access Bank purchased Transnational Bank to increase its market share in East Africa and to support its aim to become Africa’s most valued bank.
This is Access Bank’s second acquisition after reaching a binding agreement with Kenyan-based Centrum Investment Company to acquire Centrum’s 83.4% stake in Sidian Bank in Kenya. Still, the transaction was not completed in 2022 due to disagreements on certain conditions between the two parties.
NBK suffered a loss of Sh302.3 million in 2019 but rebounded the following year and generated a profit of Sh177 million in 2020. Despite the COVID-19 epidemic, the progress continued for over two years, resulting in substantial profits. However, they had challenges in 2023, resulting in a net loss of Sh3.84 billion in the year’s first half.
Paul Russo, CEO of the KCB Group, stated that only the bank, among the group’s subsidiaries, experienced a loss and that selling it to Access Bank will help safeguard their investments in NBK as well as provide new chances for its employees and other stakeholders since they acquired it in 2019.
Regardless of the transaction processes, NBK branches continue to operate normally, and the bank reassured its customers and shareholders of updates on any new developments through their official channels.
Bolaji Agbede, Acting Group CEO of Access Holdings Plc, mentioned that this transaction was a key milestone for the bank and a step toward achieving its goals for the next five years, significantly expanding its scale in the Kenyan market.
The Access CEO further expressed their confidence in the bank’s long-term earnings profile diversification and strengthening efforts, stating that these investments will bring substantial value to shareholders, customers, and other stakeholders.
