NCBA Bank Kenya PLC on Tuesday, September 26 warned its shareholders following advanced plans to acquire AIG Kenya.
In the public notice, the board told shareholders to exercise caution when trading NCBA group shares because of the material changes that might occur due to the acquisition.
“The transaction, if concluded, may have a material effect on the price of NCBA Group securities. Accordingly, shareholders and the investing public are advised to exercise caution when dealing in NCBA Group securities,” the public notice stated in part.
NCBA Group plans to buy an additional 66.67 percent stake in AIG Kenya Insurance Company Limited from an American multinational. This deal will see it take 100 percent ownership of the insurer.
The American International Group, Inc, (AIG) is a leading global insurance organization that provides a wide range of property, casualty insurance and other financial services.
In Kenya, the insurance company deals in insurance solutions for a wide range of insurance products including property, small and medium sized enterprise, aviation, and marine insurance.
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NCBA and AIG Kenya relations
NCBA Group currently holds shareholding at AIG Kenya at 33 1/3%. It has been a minority shareholder for the past 18 years.
John Gachora, managing director at NCBA, on September 25 commented on the transaction stating that, “Insurance is increasingly becoming a basic financial need for the type of customer that NCBA serves.”
“We believe that by bringing together NCBA’s physical and digital distribution platforms and AIG Kenya’s insurance capabilities we will accelerate towards our ambition to become a universal bank that addresses a full set of our customers’ financial needs,”explained.
“AIG Kenya serves customers across the East Africa region. NCBA serves customers across 4 countries in East Africa – Kenya, Uganda, Tanzania and Rwanda. As a regional banking Group, NCBA is poised to take advantage of AIG Kenya’s breadth and scale to markets in which it operates,” NCBA stated.
In addition, the lender has had continued interest in AIG Kenya shares. In 2022, NCBA’s investment in AIG Kenya hit Ksh1.03 billion from Ksh987.3 million in 2021.
The bank however has seen profits after it earned Ksh90 million as dividends from AIG in 2022, a growth from Kshh40 million in 2021.
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In the first quarter of this year (January- March) NCBA’s total shareholder funds grew to Sh87.9 billion from Sh80.3 billion.
Performance on NSE
NCBA group shares have been on the rise this year with the highest recorded price being on August 4, 2023, where they were sold for Kshs41.70.
NCBA also offers insurance services under the NCBA Bancassurance Intermediary Limited which is regulated by the Insurance Regulatory Authority.
