This archive report was first published on 7 October 2019.
On October 7, 2019, KCB Group announced the listing of additional shares on the Nairobi Securities Exchange (NSE) following the successful acquisition of National Bank of Kenya.
According to Joshua Oigara, the lender expects its non-performing loans (NPLs) to rise to 12% of the gross loans following the acquisition. However, he noted that the bank aims to reduce the NPL ratio to 8% within the next year.
The bad loans at National Bank of Kenya rose from KSh2.2 billion in 2012 to KSh31.4 billion by June 2019. These bad loans have been transferred to KCB's loan book.
As part of its recovery efforts, KCB intends to intensify loan recovery to reduce the bad loans in its newly acquired subsidiary, National Bank of Kenya.
Mr. Oigara emphasized that loan recovery is a top priority for the lender as it seeks to fully merge National Bank of Kenya into KCB Group within two years.
Additionally, KCB will invest KSh7.5 billion in capital into National Bank of Kenya to maintain liquidity and improve fund growth, which may temporarily affect the bank's capital adequacy.
