CMA denies knowledge of National bank’s takeover by KCB Group

By Steve UMIDHA On Jan 24, 2019

Capital Markets Authority (CMA) has denied any knowledge of an alleged takeover of National Bank of Kenya (NBK) by its rival lender Kenya Commercial Bank Group (KCB) following media reports that the latter was plotting to buy out the troubled bank.

“The attention of the Capital Markets Authority has been drawn to the continued media reports on possible acquisition of majority shares of National Bank of Kenya Limited by KCB Group Plc. We wish to clarify that no regulatory filings have been made to the Authority by KCB Group regarding this matter and no confirmation of the existence of such a transaction has been received,” CMA said in its cautionary notice, warning the public to exercise restraint while dealing with the lenders’ shares at the Nairobi Securities Exchange (NSE).

Unconfirmed reports indicate that the deal, whose talks have been in the offing since 2017 is worth Sh40billion with KCB rumored to be planning to shut about 34 National bank branches where it already has operations – a move that could render thousands of NBK’s staff jobless.

“An appropriate announcement shall be made in the event that details of such a transaction (if any) are filed with the Authority as required by the applicable Regulations,” said CMA’s chief executive Paul Muthaura.

The National bank is presently choked by huge burden estimated at Sh30.1billion in non-performing loans (NPLs) part of which it may be forced to write-off for non-recovery.

The lender is engaging its clients directly to reach a gentleman’s agreement –a move believed some top officials in the bank are using to get kickbacks from its corporate clients with huge debts, with assurances to ‘clear-off’ outstanding loans owed to the bank. The bank has unceasingly denied such allegations.

The revelation was made recently during summon made to the bank’s management that had appeared before the National Assembly Finance Committee chaired by Joseph Limo which had requested for detailed information on the ‘write-offs’ scheme.