Kenya Commercial Bank Group plans to complete the acquisition of collapsed Imperial Bank by end of this month, the chief executive Joshua Oigara has said.
“The deal will go on despite the ongoing restriction,” Oigara said during the release of the group’s half year 2019 results.
The transaction, in which the lender will pay a nominal Sh10 per share, will be implemented through its local subsidiary KCB Bank Kenya Limited.
Among assets to be acquired include Imperial Bank’s five branches and a portion of its loans and deposits.
The transaction will go alongside the merger with National Bank of Kenya (NBK).
KCB served NBK the detailed offer on June 19, following shareholder approval where the largest banks will acquire 100 per cent stake of the state-owned bank through a share swap deal, comprising of 10 ordinary shares of NBK for every one ordinary share of KCB.
The offer period to swap shares closes on August 30.
“We are on-course still engaging with parliament with questions they raised. We are confident that both transactions will be completed by August 30,” Oigara said.
He said majority of KCB shareholders have endorsed the transactions while individual shareholders out of NBK’s 55,ooo small shareholders aNBK have also committed themselves
The National Assembly’s Departmental Committee on Finance and National Planning, in a report tabled last week said the takeover deal by KCB undervalues NBK and it was not in the best interest of workers, taxpayers, NBK staff and minority shareholders.
However, the National Treasury has approved that merger saying it would support the State’s agenda to strengthen the financial sector.The largest lender in asset value and shareholder capital is focused on expansion through acquisitions rather than growing organically, in terms of branch numbers.Despite the mergers, the bank will have to wait until the next 25 months to hit the much expected Sh1 trillion base mark in asset value.In the financial results for six months to June, the bank’s total assets rose to Sh746.52 billion from Sh714. 31 billion recorded in the 12 months to December 2018 largely driven by growth in loans and deposits.However, the additional of Sh115.1 billion as at December 31 of NBK will only raise it to around Sh900 billion value, according to Group chief finance officer Lawrence KimathiNBK will operate independently for a year after the merger.KCB’s net profits grew by five per cent in the six months period to Sh12.7 billion from Sh11.8 billion in previous period, from lender’s […]