KCB Chief Executive Officer Joshua Oigara will chair the team that will be in charge of overseeing the trading of shares between the lender and the National Bank of Kenya (NBK) ahead of their planned merger later this year.
KCB, last month offered to buy National Bank of Kenya through a share swap of one KCB share for every 10 of NBK and with the buyout having been sanctioned by the Capital Markets Authority (CMA), the two lenders are rushing to beat the September 2019 deadline set for completing the process.
The team, which comprises of staff from both lenders, will be tasked with ensuring that the buy-out process is as seamless as possible and according to KCB, the bank has already handed over an offer document to NBK.
“The bank has received regulatory approval from the Capital Markets Authority (CMA) to serve NBK with the Offer Document pursuant to the Capital Markets Regulations, 2002. KCB this week served NBK with the Offer Document, with a response expected within 14 days. The process is expected to be completed by September 2019,” KCB said in an official statement yesterday.
Despite the banks’ eagerness to complete the share swap deal, the planned merger will still require approvals by the Competition Authority of Kenya and the Central Bank of Kenya to go through. Should the lenders get the necessary approvals, the acquisition is expected to be completed by October and the merger will result in a bank whose collective balance sheet is expected to hit Ksh.1 trillion by 2022.
Local banks have been turning to consolidation in an effort to boost their operating capabilities ever since the government capped commercial lending rates in 2016 which minimised their profit margins. Banks such as Diamond Trust of Kenya and CBA Group have been involved in similar deals in recent years.