This archive report was first published on 18 May 2020.
On May 18, 2020, KCB Group announced plans to inject up to Sh3 billion of additional capital into National Bank of Kenya to help the subsidiary comply with capital requirements and expand its business.
Despite receiving Sh5 billion capital support from KCB in December, National Bank of Kenya remains in breach of capital adequacy ratios.
According to KCB chief executive Joshua Oigara, the additional capital support will depend on several factors, including the subsidiary’s ability to recover bad loans.
‘When we acquired NBK, we estimated we will provide the subsidiary with capital of Sh7.5 billion to Sh8 billion,’ said KCB chief executive Joshua Oigara.
‘We will soon give the balance of Sh2.5 billion to Sh3 billion,’ he added, stating that the cash could be remitted by the end of the second quarter (June).
As of December, National Bank of Kenya’s core capital to total deposit ratio stood at 7.3 percent, 0.7 percentage points below the minimum requirement of eight percent.
Its core capital to total risk-weighted assets was 10 percent, 0.5 percentage points lower than the statutory minimum of 10.5 percent.
During the review period, National Bank of Kenya’s loan book dropped 3.9 percent to Sh45.8 billion, while deposits fell 12 percent to Sh86.9 billion.
