KCB set to acquire National Bank as shares suspended

KCB Buys National Bank: The clearest indication that KCB Group is looking to acquire troubled National Bank has emerged.

On Thursday morning, the Nairobi Securities Exchange stopped trading in KCB Group and National Bank shares over a material announcement affecting the two counters.

According to Financial analyst Aly Khan Satchu, the suspension of the shares means that a consolidation of the two banks is in the offing.

“I suspect the merger is a consequence of shortage of capital on the side of National Bank,” Mr. Satchu said.

While KCB’s fortunes have continued to soar and placed the lender as the most profitable bank in the region, NBK on the other end has been operating on extremely thin margins.

For example, in the period ending December 31, 2018, National Bank reported a 98.3 per cent drop in profits. The bank made Sh. 7.007 million in profit compared to Sh. 410.78 million made within the same period in 2017.

In contrast, during the same period, Kenya Commercial Bank made a Sh. 24 billion net profit, a 21.8 per cent jump from Sh. 19.7 billion in 2017 on lower costs and sustained incomes.

If successful, this will be the second bank KCB group is taking over after Central Bank of Kenya accepted the final offer from the bank to takeover Imperial Bank Limited (in receivership).

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