The Central Bank of Kenya and the National Treasury have approved the acquisition of the financially troubled National Bank of Kenya by Nigerian lender Access Bank PLC, capping months-long negotiations.
The approval, made public on Monday, brings Access Bank one step closer to completing the acquisition of all of NBK’s issued share capital and strengthening its presence in East Africa’s largest economy.
However, regulatory bodies in Nigeria have yet to finally approve the merger.
On April 4, the transaction was authorised in accordance with Section 13(4) of the Banking Act, according to a notice published in the gazette by CBK Governor Kamau Thugge. Treasury Cabinet Secretary John Mbadi approved the deal on April 10.
Access Bank to utilise NBK’s nationwide branch for expansion
The acquisition puts Access Bank in a position to expand its presence in Kenya’s cutthroat banking industry and access NBK’s nationwide branch network.
It is anticipated that a public statement verifying the transaction’s completion will be made shortly.
Although the specific financial information is still unknown, NBK’s owner, KCB Group, earlier stated that it had reached an agreement to sell the bank for 1.25 times its book value.
Although the exact amount may change, the deal might be worth around $100 million based on NBK’s 2023 book value of $79.77 million.
Access Bank’s second entry into the Kenyan market after Transnational Bank’s acquisition
After purchasing Transnational Bank in 2020, this is Access Bank’s second entry into the Kenyan market.
This action highlights its wider pan-African expansion strategy, which is similar to that of Guarantee Trust Bank and United Bank for Africa, two other Nigerian banks.
Access Bank is anticipated to provide new funding to NBK after the acquisition in order to bolster its balance sheet.
Since acquiring the bank in 2019, KCB Group has invested more than $63.5 million to stabilise its finances and steer it in the direction of profitability.