A branch of the National Bank of Kenya. PHOTO | FILE | NATION MEDIA GROUP The recommendation against the move is by the Finance and National Planning Committee, chaired by Kipkelion East MP Joseph Limo, that has been investigating the proposed acquisition.
The committee has recommended that NBK’s principal shareholders – the National Treasury (22.5 percent) and the National Social Security Fund (NSSF) (48.05 per cent), reject KCB’s offer to acquire 100 percent shareholding.
It is the view of the committee that NBK is the stronger bank with 86 branches across the country.
KCB gave an offer bid share price of Sh3.80 with NBK’s total value as Sh6 billion, against an independent valuation of a per-share price of Sh6.10 and a total value of Sh9 billion.
The multi-billion shilling takeover of the National Bank of Kenya (NBK) by Kenya Commercial Bank (KCB) appears to be headed to the rocks as a committee of the National Assembly has opposed the move.
The recommendation against the move is by the Finance and National Planning Committee, chaired by Kipkelion East MP Joseph Limo, that has been investigating the proposed acquisition.
Majority leader and Garissa Town MP Aden Duale tabled the committee’s report in the House on Wednesday.
The recommendations will, however, require the approval of the House.
ALTERNATIVE
The committee has recommended that NBK’s principal shareholders – the National Treasury (22.5 percent) and the National Social Security Fund (NSSF) (48.05 per cent), reject KCB’s offer to acquire 100 percent shareholding, the minority shareholders and other shareholders.
It wants Treasury to seek alternative ways to fund the lender despite fears of collapse if the planned takeover falls through.The need for an alternative financier, according to the report set for debate when the House resumes from a long recess starting Thursday, is to ensure the bank is compliant with the Banking Act’s capital ratios so as to continue lending and taking more deposits. NBK STRONGER It is also the view of the committee that NBK is the stronger bank with 86 branches across the country.“The main challenge the bank is facing it that of core capital and the total risk: weighted assets ratio, which is 2.4 per cent, below the minimum statutory requirement of 10.5 per cent,” the committee report says.Suspended Treasury Cabinet Secretary Henry Rotich told the Finance committee that the takeover presents an opportunity to avert the risk of NBK’s failure and prevent a banking sector […]