Access Bank Receives Conditional Approval to Acquire National Bank of Kenya

Access Bank has received a conditional go-ahead from the Competition Authority of Kenya (CAK) to acquire the National Bank of Kenya (NBK) from KCB Group.

The approval comes with a stipulation that requires Access Bank to retain at least 80% of NBK’s workforce, as well as all of its own local employees, for one year following the deal’s completion. 

The acquisition, which still awaits endorsement from the Central Bank of Kenya (CBK), is part of Access Bank’s expansion in the East African financial market.

Although the exact transaction value remains undisclosed, KCB Group had previously indicated a sale price for NBK based on a 1.25 times book value calculation. 

With NBK’s book value standing at approximately $79.77 million in 2023, reports estimate the acquisition could be worth around $100 million. Finalisation of the deal is expected by November.

The acquisition will boost Access Bank’s footprint in Kenya. Currently, Access Bank operates 23 branches across 12 counties, while NBK has a network of 77 branches in 28 counties, making it a notable presence in retail, corporate, and Islamic banking. 

This merger elevates Access Bank’s market reach in Kenya, enhancing its capacity to compete within East Africa’s largest economy.

Before the acquisition, Access Bank’s operations in Kenya were classified as tier 3, ranking 37th among the 39 licensed commercial banks in the country. In contrast, NBK holds a stronger position as a tier 2 bank. 

The merged entity is projected to command a 1.9% market share in Kenya’s banking sector, a modest figure that, according to CAK, is unlikely to disrupt competitive dynamics within the market.

Again, Access Bank’s acquisition of NBK includes NBK’s insurance subsidiary, NBK Bancassurance Intermediary Limited, which will add an insurance dimension to Access Bank’s offerings in Kenya. 

The acquisition depicts growth for Access Bank, which has expanded aggressively across Africa, acquiring financial institutions in various countries, including Kenya’s Transnational Bank in 2019.

The CAK’s approval of the merger also considers the impact on employment. CAK’s conditions are designed to mitigate job losses by requiring Access Bank to retain a significant portion of NBK’s employees for at least one year. The bank has committed to providing compensation in line with Kenyan labour laws for any staff affected by restructuring post-merger.

In a broader regional context, the Common Market for Eastern and Southern Africa (COMESA) Competition Commission had previously greenlit portions of this acquisition in markets outside Kenya, passing the Kenyan aspect to CAK for further review.

The acquisition aligns with Access Bank’s strategy of consolidating its influence in East Africa and potentially leveraging NBK’s established customer base and service scope.