KCB Group has struck a lucrative and binding agreement that will see the Kenyan bank sell its 100 per cent stake in the National Bank of Kenya (NBK) to Access Bank of Nigeria.

However, the binding deal will have to await regulatory approvals from Central Bank of Kenya (CBK), Central Bank of Nigeria as well as the COMESA Competition Commission.

According to KCB Group CEO Paul Russo, the acquisition will provide a significant chance for the bank to augment value for its shareholders and also strengthen its competitive edge.

“The past four years have been defining for NBK as a KCB Group subsidiary and this step marks the opening of new opportunities,” said Russo.

He added: “During the period, we have made progressive investments in the Bank, and we believe that this is in the best interest of the Group and its sustainability.”

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Access Bank MD & CEO Roosevelt Ogbonna said the acquisition of NBK will enable the Nigerian bank to scale its presence in Kenya as part of its ambitious five-year strategic plan.

“We are building a strong and sustainable franchise to support economic prosperity, encourage Africa trade, advance financial inclusion thereby empowering many to achieve their financial dreams,” indicated Ogbonna.

He added, “With the African Continental Free Trade Agreement, these corridors will continue to expand and by deploying our best-in-class financial solutions, we are strategically positioned to deliver sustainable value for our stakeholders.”

The Nigerian firm says completion of the transaction will see NBK merge with Access Bank Kenya to form a bigger financial institution targeting the Kenyan and East African markets.

As Access Bank and NBK await regulatory approvals in their respective countries, the lenders will continue to offer their customers through their branches and mobile banking platforms.

On September 2, 2019, CBK announced it had approved the acquisition of 100 percent shareholding of NBK by KCB Group, in accordance with Section 13(1) (e) of the Banking Act.

KCB Group is a Kenyan non-operating holding firm that owns banking subsidiaries in Kenya, Uganda, Tanzania, Rwanda, Burundi and South Sudan, and a representative office in Ethiopia.

The Group also owns non-banking subsidiaries; KCB Insurance Agency, KCB Capital and KCB Foundation and oversees operations of KCB Bank Kenya Limited and all other subsidiaries.

Russo told an investor briefing in Nairobi on Wednesday that the deal was struck at 1.25 times the book value, but fell short of disclosing the exact figure of the transaction.