Nigeria’s Access Bank Plc has revealed plans for a strategic acquisition of the National Bank of Kenya (NBK) from KCB Group Plc, as confirmed via an official tweet from the bank. This ambitious move is contingent upon fulfilling several conditions, including securing approval from the Central Bank of Kenya.
The backdrop to this acquisition involves KCB, Kenya’s second-largest bank, which took over NBK in 2019 through a rescue deal orchestrated by the central bank. NBK, at that time, was a state-controlled, medium-sized financial institution. Despite initial signals from KCB indicating a long-term commitment to NBK, recent pressures on capital adequacy ratios have led to a reconsideration of this stance, with Eric Musau, a leading figure at Standard Investment Bank in Nairobi, providing insights to Reuters on the matter.
Access Bank’s planned acquisition of NBK aligns with its strategic objectives to broaden its footprint within Kenya and leverage the burgeoning trade opportunities in the region.
On Wednesday, an agreement was finalized between the lenders, marking the initiation of the acquisition process. KCB has agreed to sell its entire 100 percent stake in NBK at 1.25 times its book value. KCB Group’s CEO, Paul Russo, announced at an investor briefing that the transaction is anticipated to be completed within the next six to nine months. Following the announcement, KCB Group’s shares surged by 9.9%.
This marks the second foray into the Kenyan banking sector for Access Bank, with its previous acquisition being Transnational Bank Limited in 2019.
Access Bank: A Growing Giant in the African Banking Landscape
Access Bank is ambitiously expanding its footprint across Africa, aiming to significantly increase the proportion of its assets located outside Nigeria by 2027. This strategic move is part of the bank’s broader vision to outpace the competition, not only from the rapidly evolving fintech sector within its home market but also from other banking entities across the continent.
The bank’s recent activities underscore its commitment to this growth strategy. It has been actively increasing its presence and operations in several African countries, including the Democratic Republic of Congo and Rwanda. Additionally, Access Bank has either completed acquisitions or is in the process of acquiring significant stakes in several financial institutions across the continent.
These include Uganda’s Finance Trust Bank Limited, which it targeted in January, a controlling interest in the African Banking Corporation of Tanzania, and Standard Chartered Bank Plc’s consumer, private, and business banking operations in Tanzania. This aggressive expansion plan not only strengthens Access Bank’s position in the African banking sector but also showcases its dedication to fostering financial inclusion and growth across the continent.
This acquisition is part of Access Bank’s aggressive strategy to expand its influence across the continent through mergers and acquisitions. The bank has a history of strategic acquisitions, including Grobank in South Africa, BancABC in Botswana and Mozambique, Diamond Bank in Nigeria, and Finibanco Angola, demonstrating its commitment to growing its footprint and enhancing its market presence in Africa.
Access Bank’s CEO, Mr. Roosevelt Ogbonna, remarked on the significance of the deal, stating, “This transaction is a key milestone for Access Bank, propelling us closer to realizing our five-year strategic objectives by expanding our presence in the Kenyan market.”
KCB Group’s CEO, Mr. Paul Russo, also commented on the sale, noting its potential to revitalize the fortunes of the National Bank of Kenya, which has faced challenges since its acquisition by KCB, Kenya’s largest bank, in 2019. “After evaluating three options, the board decided that accepting Access Group’s binding offer was the best course of action to safeguard the value and effort invested in NBK,” Russo explained during the announcement of KCB Group’s financial outcomes for 2023.
