The Competition Authority of Kenya (CAK) has approved a plan to sell all National Bank of Kenya (NBK’s) shares, sealing the fate of the employees.
According to the approval letter shared on Wednesday, October 30, CAK reviewed whether this acquisition could harm competition in Kenya’s financial sector and determined that it would not.
Therefore, Access Bank PLC, a Nigerian bank that operates in Kenya as Access Bank (Kenya) PLC, has been given the green light to take over the bank.
However, in an attempt to put in measures to protect jobs, CAK has indicated that the sale is approved on condition that Access Bank keeps at least 80% of NBK’s current employees.
The employees will continue working for the bank for one year after the acquisition is completed.
“The transaction has been approved on condition that Access Bank Plc retains, for one (1) year following completion of the transaction, at least 80% of the target’s current workforce and all Access Bank (Kenya) Plc employees, its local subsidiary,” read the statement in part.
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Details of the Transaction Between Access Bank and National Bank
Access Bank PLC is buying all the shares of the National Bank of Kenya (NBK) from KCB Group, meaning that Access Bank will own NBK completely.
Additionally, the transaction gives Access Bank control of NBK’s insurance-related subsidiary, NBK Bancassurance Intermediary Limited (NBBIL).
After the purchase is complete, Access Bank plans to merge NBK with its existing operations in Kenya (Access Bank Kenya).
The merger had to be approved by CAK because of a combined turnover that was greater than Ksh1 billion. The rule is put in place to ensure that large mergers don’t harm the market by reducing competition.
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About the Merging Banks
Access Bank is a full-service bank, publicly traded on the Nigerian Stock Exchange and regulated by the Central Bank of Nigeria.
However, in Kenya, it operates as Access Bank (Kenya) Plc, which offers both retail and corporate banking services through its 23 branches across 12 counties.
On the other hand, NBK is a Kenyan commercial bank fully owned by KCB Group Plc, a public company listed on the Nairobi Stock Exchange.
Also, it is cross-listed on stock exchanges in Tanzania, Uganda, and Rwanda.
NBK has two main subsidiaries, the NBK Bancassurance Intermediary Limited (NBBIL), which part of the transaction, provides insurance services, and KCB Asset Management Limited, which is not included in the transaction, as it had already been transferred to KCB Group.
Kenyan commercial banks are classified into three groups using a weighted composite index comprising net assets, customer deposits, capital, and reserves.
Also, the number of deposit accounts, the number of loan accounts, the number and spread of branches, and banking agents, and the number and spread of Automated Teller Systems are considered.
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