Kenya could be the major gainer in the acquisition of National Bank of Kenya (NBK) by Kenya Commercial Bank (KCB), Ecofin Agency gathered from available information.

Indeed, the government is a major stakeholder in the two financial institutions via public institutions. Kenya Commercial Bank insisted that prior to the operation, National Bank of Kenya’s preference shares should be converted into ordinary shares. This would increase the said institution’s shares to 1.4 billion. KCB will offer 140 million of its shares since it is suggesting the 1/10 exchange ratio.

These shares will be mostly received by public institutions that own NBK’s preference shares. Analysis submitted by research firms in Kenya estimate that at the end of the acquisition, public institutions would have 20.5% stakes in Kenya Commercial Bank, making them the major shareholder.  

Thanks to this operation, Kenya will inject funds in NBK without losing control over it. Kenya Commercial Bank plans to invest Ksh7.5 billion ($75 million) to support NBK. According to its managing director Joshua Oigara, this investment will not affect KCB’s own equity.

Idriss Linge