Access Holdings Plc, Nigeria’s biggest lender by assets, completed a buyout of National Bank of Kenya (NBK), the financial services group announced on Monday, firming up its grip on the East African market, where it already has a substantial presence.
The deal, which closed in March, transferred the full ownership of NBK to Access Bank, the group’s commercial banking division after regulators in Nigeria and Kenya endorsed the transaction.
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The financial institution said the acquisition is pivotal to consolidating Access Bank’s presence in Kenya and the rest of East Africa.
“It’s a strategic play. When you are appraising different markets and where to go, the main thing you are looking at is where the viable markets are and which one of them presents the best opportunities. When you look at Kenya in the context of broader East Africa, it is one of the key hubs with a relatively decent macro profile,” David Adu, deal advisor at Meristem Securities, told PREMIUM TIMES.
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“Access Holdings doesn’t like to play small. They are looking to consolidate. This is one of the ways to go about it. You acquire different players here and there. Banking is an economy of scale. You get the best when you are as big as possible,” he added.
KCB Group, a Nairobi-based financial services holding company, owned NBK until the takeover.
Access Holdings, whose assets are currently valued at over N39 trillion, has been on a drive to extend its reach in Kenya after entering the market for the first time in 2020 by way of a KSh1.4 billion purchase of Transnational Bank Kenya.
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The move to procure an 83.4 per cent shareholding in Sidian Bank from Centum Investment hit a brick wall in early 2023 when both parties disagreed on the variation of some precedent conditions.
The banking group expects to leverage Kenya as a key corridor for trade flows in the region as the continent moves to implement the African Continental Free Trade Agreement.
“Kenya is a hub for regional commerce, and with NBK now part of the Access Bank family, we are well-positioned to leverage our combined strengths to provide high-impact banking solutions to our customers,” said Roosevelt Ogbonna, Access Bank’s managing director.
“NBK’s heritage and local expertise, combined with our pan-African network and innovation-led approach, will position us to connect African businesses to global markets, facilitating economic growth and inclusive prosperity.”
READ ALSO: Access Bank faces charges over alleged diversion of N826 million
Established in 1968, NBK operates 85 branches and reported a 48.8 per cent drop in net profit to KSh275.7 million in the quarter to March, compared to a year ago, according to its latest unaudited financial report. Assets currently total KSh149.6 billion.
Access Holdings is hitting the brakes on new deals after several banking acquisitions across Africa in recent years as it seeks to consolidate the buyouts.
“We are consolidating on our geographic expansion, which means, of course, that our efforts at this point in time are pegging down transactions that are mid-flights, transactions that have been announced and so on. It will probably take another 24 months to finish,” Aigboje Aig-Imoukhuede, chair of the directors’ board, told a meeting of shareholders in Lagos last month.
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