National Bank set to be sold to Nigerian lender 

Nigeria’s Access Bank is set to ac-quire 100 per cent of National Bank of Kenya Limited (NBK) from KCB Group.

KCB Group CEO Paul Russo said the transaction’s success now hinges on standard conditions, including obtaining regulatory approvals from the Central Banks of Kenya and Nigeria, Common Market for Eastern and Southern Africa (Comesa) Competition Commission, and notifications to other relevant regulators.

“This transaction represents what we believe is a great opportunity to maximise value for our shareholders while strengthening the competitive position for the Group,” he said.

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

The announcement was made even as KCB Group an-nounced a Sh37.5 billion net profit for the fa year 2023, driven by a27.2 per cent revenue growth that Russo attributed to organic growth across most business lines.

In the review period, total assets grew by 40 per cent to Sh2.17 trillion, because of increased customer deposits that increased by 48.9 per cent from Sh1.14 trillion to Sh1.70 trillion, largely from KCB Bank Kenya business and the full-year consolidation of TMB. Revenues of Sh165.2 billion were boosted by both funded income and a 33.9 per cent growth in non-

KCB Group Chairman Joseph Kinyua (centre) with Group Finance Director, Lawrence Kimathi (left) and Group CEO, Paul Russo engage during the release of the 2023 full year financial results yesterday. 

Despite costs rising to Sh83.2 billion due to TMB consoli-dation and other factors, KCB pri-oritised cost management, allowing for growth-driving investments and solid capital and liquidity buffers.

Group businesses (excluding KCB Bank Kenya) contributed 36.7 per cent to overall profitability, up from 12.2 per cent, indicating the success of the regional expansion strategy.

Total assets grew by 40 per cent to reach Sh2.17 trillion, a growth that was largely funded by an increase in customer deposits, Funded income Revenues, which amounted to Sh165.2 billion, were boosted by both funded income from earning assets and non-funded income.

The latter grew by 33.9 per cent, supported by increased transactions across the network, adoption of digital banking and alternative channels, entry into other markets, and trade finance business.

In terms of asset quality, KCB Group has seen a decrease in the ratio of non-performing loans (NPLsI to 16.6 per cent, down from 17.3 per cent, because of the growth of the loan book and the Group’s intensi-fied efforts to enhance asset quality.

The total stock of NPLs now stands at Sh199.1 Provisions also rose by 154.7 per cent due to the downgrading of fa-cilities in Kenya and additional pro-visions made for foreign currency facilities, which have been affected by the depreciation of the Kenyan Shilling against hard currencies.

Customer deposits also increased by 48.9 per cent from Sh1.14 trillion to Sh1.70 trillion largely due to the business of KCB Bank Kenya and the full-year consolidation of TMB.

Customer loans also grew by 28.7 per cent due to additional disbursements made during the year, reaching Sh1.2 trillion, up from Sh934 billion in 2022.

Shareholders’ funds have increased to Sh236.4 billion from Sh206.3 billion the previous year, representing a 14 per cent growth in profitability during the year.