Kelvin Bowoto
Access Bank announced on Wednesday afternoon that it has agreed to acquire the National Bank of Kenya (NBK), following weeks of unverified claims. One of the most pressing uncertainties regarding the transaction—which is still awaiting permission from Nigerian and Kenyan regulators—is how much Access Bank will pay for the acquisition.
Access Bank will buy the National Bank of Kenya (NBK) from KCB Group for 1.25 times the bank’s book value, the firm announced on Wednesday. The acquisition values NBK at around $100 million, based on its book value of $79.77 million in 2023.
However, one financial expert stated that the actual acquisition amount could be significantly different from that estimate. The purchase is likely to take six to nine months to complete, according to KCB Group’s CEO, Paul Russo.
In 2020, Access Bank paid $12.8 million for Transnational Bank. In 2022, it agreed to pay $37 million for 83% of Sidian Bank, a Kenyan commercial bank, resulting in a price-to-book multiple of 1.1x.
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“All parties will be working together in the coming months to fulfill the conditions precedent relating to the proposed acquisition, which includes the regulatory approvals of the Central Bank of Nigeria and the Central Bank of Kenya,” according to a joint statement issued by the two lenders.
Access Bank, which currently operates 22 branches in Kenya, will expand its presence in East Africa’s largest economy due to NBK’s statewide network. However, the Nigerian lender is anticipated to invest more in NBK.
Since acquiring NBK in 2019, KCB Group has worked to return the bank to profitability, spending $63.5 million to guarantee that it meets minimum capital requirements.
“Throughout the period, we have made progressive investments in the bank, and we think that this is in the best interests of the group and its long-term viability. Our growth strategy is based on both organic and inorganic strategies, and we will continue to look for opportunities to maximize shareholder value,” Russo said.
Techrectory with Agency Report.
