This archive report was first published on 10 September 2019.
On September 10, 2019, the Competition Authority of Kenya (CAK) imposed a restriction on the Kenya Commercial Bank Group (KCB) from firing at least 90% of National Bank (NBK) employees after it completes the buyout of the lender.
The jobs protection by the regulator will last for one and a half years. This move by the CAK is part of its efforts to entrench job protections in mergers and acquisitions.
According to the regulator, KCB had earlier stated that it would eliminate excess staff and branches to accelerate returns from the all-stock acquisition. However, the CAK's restriction means that a majority of NBK employees can now rest assured that their jobs are protected.
“In order to strike a balance between addressing the public interest concerns and accommodating the strategic intent of the merging parties, the Authority was of the view that granting a conditional approval to the proposed transaction would be appropriate,” the CAK statement read in part.
At the time of the buyout, KCB had 4,835 employees in Kenya, while NBK's workforce stood at 1,356. Despite the regulatory constraint, KCB can still lay off 619 workers or 10% of the total staff count of 6,191.
The restriction comes just days after NBK Managing Director Wilfred Musau lost his job to a KCB insider. KCB CEO Joshua Oigara appointed Paul Russo as the MD designate for NBK during the two-year transitional period as the lender becomes integrated with KCB.
