Parliament wants Treasury and the NSSF to halt the proposed takeover of the National Bank of Kenya by Kenya Commercial Bank. But the parliamentary Finance committee is misguided.
The NBK is in a very shaky financial position with many non-performing loans. The Finance committee recommended that government recapitalise NBK which would cost approximately Sh12 billion.
Treasury Secretary Ukur Yattani yesterday stated that he believes the merger is in the best interests of NBK. He is right.
The combined Treasury and NSSF shareholding of NBK is 72 percent. Government owns 17 percent of KCB but still has a strong influence over it. The merger will consolidate government's interests in the financial sector.
The MPs believed that KCB undervalued NBK at Sh6 billion with its 10-1 share swap. NBK shareholders have until August 31 to accept the KCB offer but they would be fools not to accept. The alternative is the financial collapse of NBK or a government cash injection which would substantially dilute their shareholding.
But at the end of the day, the issue is academic. Government is the main NBK shareholder and what it wants, it will get.
Quote of the day: "If success is about winning the league, there will always be 19 disappointed clubs."
Roy Hodgson
The English football manager was born onAugust 9, 1947
