Access Bank, the largest bank in Nigeria in terms of assets, is currently nearing completion on its acquisition of National Bank of Kenya (NBK), which is controlled by the KCB Group. The deal was anticipated to conclude five months ago.
Access Bank's pan-African expansion will reach a critical milestone if the acquisition is successful, strengthening its position in Kenya, the largest economy and financial centre in East Africa.
Paul Russo, the CEO of the KCB Group, stated on Wednesday that the acquisition is still on track and that KCB has taken NBK's performance into account when calculating its 2024 full-year results.
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“We are at advanced stages of regulatory approval from both sides. I am very confident that we are at the tail,” Russo stated during the bank’s Financial Year in 2024 results announcement.
Access Bank to retain 80% of NBK's 1,384 employees
Kenya's Competition Authority (CAK) authorised the deal in October 2024, provided Access Bank kept at least 80% of NBK's 1,384 employees for a year following the acquisition.
Additionally, Access Bank was ordered to keep all 316 workers at its local subsidiary, Access Bank Kenya. With CAK's permission, the deal was one step closer to being finalised.
“We extended the long stop date to February of this year because we hadn’t gotten all the regulatory approvals,” said KCB Group’s CFO Lawrence Kimathi. “Within that period, we got approval from the CBN, so the only approval that’s remaining is from the Central Bank of Kenya. Access themselves have written to our regulator to say that they are keen to close this transaction.”
Impact of National Bank of Kenya's sale
The impact of the impending sale was reflected in KCB's 2024 financial performance. The highest balance sheet in the region, valued at KES 2.0 trillion ($15.4 billion), was disclosed by the lender.
However, the appreciation of the Kenyan shilling relative to other regional currencies was a major factor in the 10 percent fall in total assets.
The conversion of NBK balances to other assets and liabilities has an additional effect on the decline in deposits and loans.
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Without impact of NBK's sale
Excluding the effect of NBK, loans increased by 10.5 percent while deposits decreased by 0.1 percent.
Although KCB earlier agreed to sell NBK at 1.25 times its book value, indicating a price of around $100 million based on NBK's book value of $79.77 million in 2023, the deal's exact worth is still unknown.
By purchasing NBK's 77 branches throughout 28 counties, Access Bank—which currently has 23 branches across 12 counties—will greatly increase its reach.
Despite this expansion, the combined company will only have a 1.9 percent market share, which CAK claims won't affect competition because of the dominance of banks like Standard Chartered, Equity, and Co-operative.
Access Bank is a tier-3 lender that is currently ranked 37th out of 39 regulated banks in Kenya. Its position and growth potential in the market will be strengthened by the acquisition of tier-2 bank NBK.
