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Amidst media reports about its potential sale, National Bank of Kenya (NBK), a subsidiary of KCB Group PLC, has issued a formal statement to address the speculation.
In the statement issued on Wednesday March 20, the bank reassured its clientele and stakeholders after reports about possible change of ownership to a Nigerian lender.
KCB Group is set to sell NBK to Nigeria's Access Bank PLC in a deal rumoured to be worth more than Sh12 billion.
In a statement, NBK confirmed that its branches are fully operational, with the bank’s services continuing as usual without any disruption to daily activities.
The bank pledged to keep its customers and other stakeholders updated on new developments through its official channels.
"Should there be any developments we will communicate directly with you through our official channels," the statement read in part.
"We appreciate your trust and loyalty to out institution. We remain committed to providing exceptional service and maintaining the highest standards of integrity," the bank added.
READ: Why Nigeria's Access Bank has pumped billions to buy 3 Kenyan banks in last 4 years
KCB Share price spikes on speculation of selling National Bank
The news about the potential sale of NBK was first reported by Business Daily & Nation which attributed the report to sources.
KCB shares witnessed a rise on the back of the news, ahead of the release of the full year results announcement scheduled for later in the day
According to the article, NBK, whose book value was estimated to be Sh10 billion, had so far received Sh12.5 billion in capital injection from KCB since the acquisition in 2019.
The acquisition involved KCB offering to buy 100% of NBK by swapping 10 ordinary NBK shares for each ordinary KCB share, in a deal midwifed by Central Bank of Kenya and the National Treasury.
This acquisition aimed to strengthen KCB's position as the largest bank in East Africa by assets and increase its access to public-sector deposits, as NBK held substantial deposits from government institutions like the Kenya Airports Authority and the Kenya Revenue Authority.
The transaction was part of KCB's growth strategy, following a period of expansion.
KCB intended to run NBK as a stand-alone subsidiary for about two years before integrating it into its operations.
NBK's performance since acquisition by KCB Group
NBK posted a Sh302.3 million loss for the year ending in December 31, 2019.
In 2020, the bank was able to post a Sh177 million full year 2020 net profit.
This improved performance was driven by an increase in loan volumes and lower operating costs, despite the Covid-19 pandemic.
In 2021, NBK posted Sh1.1 billion in profit after tax for full year 2021.
This represented a 431% increase from 2020, driven by increased income from loan interest and foreign exchange trading, coupled with lower loan loss provisions.
In 2022, National Bank posted a profit after tax of Sh828 million for the financial year ending December 31, 2022.
In 2023 National Bank of Kenya (NBK) announced a Sh3.84 billion net loss for the half year ended June.
This was largely attributed to a Sh2.3 billion payout to a former Member of Parliament as compensation for auctioning his sisal farm.