The Central Bank of Kenya recently approved Kenya Commercial Bank’s 100 percent acquisition of National Bank of Kenya. National Bank of Kenya acquisition was granted approval under Section 13(1) (e) of the Banking Act.
After the acquisition is complete, National Bank of Kenya will function as a subsidiary of Kenya Commercial Bank up to two years. With that, Kenya Commercial Bank will become the biggest lender by numbers and assets in the East African region.
The central bank said that the acquisition of National Bank of Kenya will strengthen the banks’ corporate, public sector and retail in both domestic and regional franchises.
Kenya Commercial Bank CEO and Managing Director Joshua Oigara said “We are confident that we shall conclude this process shortly following the receipt of the necessary approvals. We have received a good indication from NBK shareholders and we shall announce the official results within the legally stipulated timelines so as to get into the next steps of the transaction.”
Following the central bank’s approval, Kenya Commercial Bank appointed Paul Russo as the designated managing director of National Bank of Kenya. Russo is expected to lead the transitional team that will report into Oigara, the media reported.
Russo is Kenya Commercial Bank Group Director of Regional Businesses. Oigara added that Kenya Commercial Bank has offered to allow National Bank of Kenya to operate for the next two years without merging it into a single entity.
National Bank of Kenya is a wholly-owned government entity, however. The government has reduced its shareholding in the bank over the years. It has been listed on the Nairobi Stock Exchange. Currently, the bank has two subsidiaries NBK Insurance Agency and Natbank Trustee and Investment.