Access Holdings has announced plans to acquire the National Bank of Kenya (NBK), marking its first major deal since the passing of Herbert Wigwe, the former Group Managing Director/CEO.
The decision to acquire NBK comes in the wake of an earlier report from Nairametrics regarding the sale of NBK by KCB Group Plc. According to a corporate disclosure on the Nigerian Exchange Group (NGX) website, Access Bank Plc, the flagship subsidiary of Access Holdings, has entered into a binding agreement with KCB Group Plc for the acquisition of the entire issued share capital of NBK.
KCB Group Plc, which also serves as the holding company of KCB Bank Ltd, Kenya’s largest commercial bank, will divest its ownership of NBK to Access Holdings. The acquisition aligns with Access Bank’s strategic expansion initiative and is poised to solidify its footprint in the East African market.
Bolaji Agbede, the Acting Group CEO of Access Holdings Plc, commented on the transaction, stating, “This proposed acquisition marks a significant step in the execution of our five-year strategic plan aimed at positioning the Bank as Africa’s Gateway to the World.” Agbede emphasized NBK’s strong reputation and robust balance sheet, with assets exceeding US$1.1 billion, as factors driving the decision to pursue the acquisition.
“We remain confident that our investments towards diversifying and strengthening the Bank’s long-term earnings profile will deliver significant value for our shareholders, customers, and wider stakeholder groups,” Agbede added, underscoring the strategic rationale behind the acquisition.
The move signifies Access Corporation’s commitment to its aggressive growth model despite the loss of Herbert Wigwe, indicating its resolve to pursue inorganic expansion opportunities to drive shareholder value.
A closer examination of NBK’s financial performance reveals mixed results. In the third quarter of 2023, the bank reported a loss of approximately Ksh 3 billion ($22.5 million), reflecting operational challenges and market dynamics. Despite this, NBK maintains a net equity of Ksh 10.6 billion ($79.6 million) as of September 2023, underscoring its resilience amidst adversity.
However, NBK carries a significant retained loss of about Ksh 7.9 billion ($59.3 million), highlighting the need for strategic intervention and operational restructuring to restore profitability and sustainability.
Access Holdings’ acquisition of NBK presents a unique opportunity for synergies and value creation. By leveraging its expertise, resources, and market presence, Access Bank aims to drive operational efficiency, enhance customer experience, and capitalize on growth opportunities in the Kenyan banking sector.
The transaction is subject to regulatory approvals and customary closing conditions. Upon completion, Access Holdings will embark on a comprehensive integration process to streamline operations, optimize cost structures, and maximize synergies across the combined entity.
As Access Holdings prepares to embark on this transformative journey, stakeholders closely monitor developments, anticipating the impact of the acquisition on the banking landscape in Kenya and beyond. With strategic foresight and prudent execution, Access Holdings aims to redefine its position as a leading financial institution in Africa, driving sustainable growth and value creation for all stakeholders.
