KCB agrees to sell National Bank to Access Bank in a ksh 13.2 billion deal
- Published By Jedida Barasa For The Statesman Digital
- 9 months ago
Nigerian top lender, Access Bank Plc, will pay KCB Group about Sh13.2 billion to acquire National Bank of Kenya (NBK), even as the lender announced an eight per cent decline in its net profit on higher operating costs.
KCB Group chief executive Paul Russo said the lender has signed a binding agreement with Access in a deal that he hopes will be completed in the next six to nine months.
The deal will see Access pay multiples of 1.25 times the book value of NBK, which stood at Sh10.57 billion as at end of December 2023. This values the deal at about Sh13.2 billion even though the actual figure will be arrived at on the actual day of signing the sale deal.
“This transaction represents what we believe is a great opportunity to maximise value for our shareholders while strengthening the competitive position for the Group. The past four years have been defining for NBK as a KCB Group subsidiary and this step marks the opening of new opportunities,” Mr Russo said.
The NBK sale announcement came as KCB Group’s full-year net profit dropped by 8.3 per cent to Sh37.46 billion from Sh40.83 billion. Access Bank will pay 1.25 times the net assets of NBK on the date of the deal’s conclusion.
KCB operating expenses in the review jumped 60.9 per cent to Sh116.79 billion from Sh72.57 billion, leading to a drop in net profit despite operating income having grown 27.2 percent to Sh165.24 billion. Net interest income grew 23.9 per cent to Sh107.3 billion while non-interest income increased by 33.9 percent to Sh57.9 billion.
Mr Russo said the group had to do a “clean up” that included dealing with legacy issues such as non-performing loans and that required taking “tough calls for the future”.
The rise in operating expenses came in the period KCB raised its provisioning for loan defaults 2.5 times to Sh33.64 billion driven by downgraded loans in Kenya and additional provisions on foreign currency facilities as the Kenya shilling shed a quarter of its value against the dollar.
Staff costs rose 26 per cent to Sh38.14 billion to reflect the consolidation of DRC Congo’s Trust Merchant Bank (TMB) into KCB operations after the mid-December 2022 acquisition of an 85 percent stake for Sh25.1 billion.
The rise in operating expenses was also driven by a 76.8 per cent rise in depreciation charge to Sh7.06 billion and a 61 per cent growth in other operating costs to Sh34.6 billion.
KCB Group shareholders will for the first time in 21 years miss out on dividends with the lender saying the decision to not recommend any dividend was necessary so as to preserve capital, especially for KCB Bank Kenya.
Share on
SHARE YOUR COMMENT
MORE STORIES FOR YOU
Trending Stories
DJ Mo’s former illicit lo...
- Published By Jane
- January 15, 2024
Mapenzi! Zari and Tanasha...
- Published By Jane
- October 24, 2023
Zuchu Speaks on Diamond P...
- Published By Jane
- October 12, 2023
Hio Ni Upumbavu Wasituche...
- Published By Jane
- November 8, 2023
RECOMMENDED FOR YOU
How to deal with a silent...
- Published By Jedida
- October 16, 2024
How to set yourself up fo...
- Published By Jedida
- October 16, 2024
Postpartum Hemorrhage: Si...
- Published By Jedida
- October 16, 2024
Study reveals long term e...
- Published By Jedida
- October 16, 2024
Latest Stories
Kimani Ichung’wah calls f...
- Published By Jedida
- December 23, 2024
President Ruto announces...
- Published By Jedida
- December 23, 2024
EPL 24/25: Chelsea draw 0...
- Published By Jedida
- December 23, 2024
EPL 24/25: Liverpool beat...
- Published By Jedida
- December 23, 2024