KCB Group picks designate National Bank boss as takeover nears end
National Bank of Kenya (NBK) will continue to operate as a subsidiary of KCB Group for a maximum period of two years during which its systems will be integrated into KCB.
KCB Group has also its Group Director for Regional Businesses, Paul Russo, as the designate managing director of NBK for the two-year period of integration into KCB. He will will lead the transition team that will report to the KCB Group chief executive Joshua Oigara.
The appointment comes a day after CBK said it had no objection to KCB Group planned 100 per cent acquisition of National Bank. Other regulators such as Capital Market Authority and Competition Authority of Kenya had approved the takeover bid.
Oigara said the group has set a target to fully integrate NBK into KCB in 24 months upon acquisition. “During that period, we will be taking a number of integration decisions including how to best structure NBK to more excellently deliver value to our customers,” he said.
KCB Group is slated to be the biggest bank whose combined balance sheet is expected to hit Sh1 trillion in three years. It has subsidiaries in Uganda, Tanzania, Rwanda, Burundi and South Sudan.
It said the acquisition is part of its strategy to explore opportunities for new growth while investing in and maximising the returns from the group’s existing businesses. The acquisition is expected to buttress the group’s position as the largest bank by asset base in the region.
Sources familiar with the negotiations before the proposed transaction was announced described the offer as a “rescue deal” aimed at pulling NBK out of its perennial low liquidity troubles.
In NBK independent advisor report, Job Kihumba, Executive Director, Standard Investment Bank, said the financial institution had been in breach of regulatory capital requirement since 2015.
He said if the breach was not dealt with, there was a likelihood that other non-capital related ratios such as single obligor, insider lending to core capital and ratio of non-core assets to the core capital will also be breached.