GROWTH

KCB Group lists more shares at NSE to fundraise for expansion

In Summary

•The listing will enhance the vibrancy of the capital market and will fuel continued business growth

•The additional stock now pushes the lender’s shares to 3,209,043,204, further cementing its position as the biggest bank in terms of market capitalization

KCB CEO Joshua Oigara with Group chairman Ngeny Biwott addressing the media
KCB CEO Joshua Oigara with Group chairman Ngeny Biwott addressing the media
Image: ENOS TECHE

KCB Group Plc on Friday listed an additional 142,979,717 shares at the Nairobi Securities Exchange (NSE) following the successful acquisition of the National Bank of Kenya (NBK).

The additional stock now pushes the lender’s shares to 3,209,043,204, further cementing its position as the biggest bank in terms of market capitalization at the Nairobi bourse.

KCB Group first listed at the NSE in 1988 before cross-listing on Dar es Salaam Stock Exchange (DSE), Uganda Securities Exchange (USE) and Rwanda Stock Exchange (RSE).

Speaking during the bell ringing ceremony, KCB Group CEO Joshua Oigara said the initiative provides more shares and more liquidity on the counter, allowing more investors to invest in a profitable company.

“The acquisition process has been seamless thanks to the support we’ve received from our shareholders. We remain optimistic that we will continue delivering greater value to all our stakeholders,” he said.

KCB Group chairman Andrew Kairu said the listing will enhance vibrancy of the capital market and will be instrumental in fueling continued business growth and the execution of the Bank’s expansion plans.

“The funds raised will further strengthen our ability to achieve our long term strategic objectives anchored on deepening our presence and expanding to new markets in Sub-Saharan Africa,” Kairu said.

As part of the lender’s expansion drive, KCB has for instance already established a representative office in Ethiopia and is eyeing market entries to Somalia and Congo in the next three years.

The acquisition of NBK is the biggest bank merger in Kenyan history and is a rare case study in the market; where a listed lender was acquired by a bigger rival.

KCB proposes to maintain NBK as a stand-alone subsidiary of KCB Group for a period of two years post-acquisition and thereafter fully integrate NBK into KCB Bank Kenya.

KCB Group’s balance sheet stood at Sh714 billion while NBK’s stood at Sh114 billion at the close of last year, pushing the combined muscle to Sh814 billion.

“The merged entity will have a unique opportunity to create a Sh1 trillion balance sheet financial institution by end of 2022,” Oigara told journalists in June.

Even so, some National Bank directors complained that KCB undervalued the company by almost 38 per cent in the takeover offer.

The board, in the advisory circular to its shareholders, said the fair valuation is one KCB share for every 6.23 NBK shares and not one for every 10 as offered.

“Based on the Independent Advisor’s Report, the NBK board is aware that the offer made by KCB falls below the expected valuation range,’’ the circular read in part.