KCB Group injects Sh5Bn into NBK after acquisition

By Steve Umidha

KCB Group, has injected Sh5billion into National Bank of Kenya (NBK), which it acquired last year.

In a statement Thursday, the Kenya’s biggest lender by assets said the move would bolster NBK’s operations to remain afloat.

“In addition to enabling NBK to comply with capital adequacy requirements, the injection bolsters NBK’s financial resources,” the lender said.

KCB in September last year picked Paul Russo as the designate Managing Director of NBK for the transitional 2-year period of its integration into KCB, subject to fit and proper approval by the Central Bank of Kenya (CBK).

Russo—who is the KCB Group Director of Regional Businesses— will lead the transition team that will report to the KCB Group Chief Executive Officer and Managing Director Joshua Oigara.

The developments come a day after the CBK said that it had no objection to KCB Group planned acquisition of 100 per cent stake in NBK in an offer to shareholders which closed on Friday August 30, 2019.

The CBK approval followed the one by the Competition Authority of Kenya which granted approval to East Africa’s largest bank by assets to finalize the deal.

The transaction is subject to regulatory approvals pursuant to regulation 4(1) of the of The Capital Markets (Take-overs and Mergers) Regulations, 2002.

The acquisition is part of KCB’s ongoing strategy to explore opportunities for new growth while investing in and maximizing the returns from the Group’s existing businesses.

It is anticipated that upon acquisition, NBK will continue to operate as a subsidiary of KCB Group for a maximum period of two years.

The historic acquisition – the tenth in Kenya’s banking history – is expected to buttress the Group’s position as the largest bank by asset base in the East African region.