This archive report was first published on 7 August 2019.
Published on August 7, 2019, a National Assembly committee has opposed the proposed takeover of the National Bank of Kenya (NBK) by Kenya Commercial Bank (KCB).
The Finance and National Planning Committee, chaired by Kipkelion East MP Joseph Limo, has been investigating the proposed acquisition and 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 committee's report, tabled by Majority Leader Aden Duale, notes that NBK is the stronger bank with 86 branches across the country and that the takeover presents an opportunity to avert the risk of NBK's failure and prevent a banking sector crisis.
However, the committee has expressed concerns over the offer's fairness, citing a per-share price of Sh3.80 by KCB, which is lower than the independent valuation of Sh6.10 per share.
The MPs also note that NBK is the principal collector of revenue for the Kenya Revenue Authority (KRA) and is a strategic government institution.
The board of directors of the NBK has attributed the bank's problems to lack of capital, operating below the capital ratios, and constrained business growth.
