Trans National Bank Buyout: Nigerian Tier-1 lender, Access Bank says it is ready to acquire the Transnational Bank of Kenya. CEO of Access Bank Herbert Wigwe, says he anticipates that the deal will be concluded before the end of November. The ownership of Transnational Bank is associated with the family of the former president Daniel Arap Moi.
The Competition Authority of Kenya gave Nigeria’s biggest lender the go-ahead to acquire 93.57% of Trans National Bank Ltd, as consolidation in the East African nation’s banking industry gathers pace.
Access Bank Group Head Office, Nigeria
Access Bank Plc’s purchase follows the merger of NIC Group Plc and Commercial Bank of Africa Ltd., and KCB Group Ltd.’s acquisition of National Bank of Kenya Ltd. earlier this year. Access Bank joins other Nigerian lenders Guaranty Trust Bank Ltd. and United Bank of Africa Plc in operating in the Kenyan market.
The deal bodes well for the Central Bank of Kenya’s push for consolidation in an industry of more than 40 lenders and a population of almost 50 million people. Kenya has more banks per person than South Africa and Nigeria, Africa’s two largest economies.
In the past two years, SBM Holdings Ltd. of Mauritius bought up some of the assets of Chase Bank Kenya Ltd. and the entire capital of Fidelity Commercial Bank Ltd.
Transnational, which swung to a full-year pretax loss of 98.5 million shillings ($951,690) in 2018, lends mainly to the agricultural sector, according to its annual report. Non-performing loans ballooned 58% to 1.85 billion shillings, while loans rose 0.5% to 6.63 billion shillings, it said.
Now, loan defaulters will have to get notified before they have their details submitted to the dreaded Credit Reference Bureau. The move will come from a new law by the Central Bank of Kenya that is meant to protect loan defaulters who get enlisted unknowingly.
The pending law will require loaning institutions to inform the customers appropriately before reporting them. The law however prohibits Sacco, banks and microfinances. It is not clear if loaning apps will be included.
Mobile lending apps that are not affiliated to any bank are not controlled by the Central Bank of Kenya.
Loan approval for banks is done on basis of credit score
“An institution and a third party credit information provider shall notify the customer within one month before a loan becomes non-performing that the institution shall submit to a bureau the information on the loan immediately it becomes non-performing,” reads the draft law in parts.
From the law, any customer to a financial institution will be acknowledged and will also have a right to know any information about them submitted to any credit reference bureau.
On several occasions, CBK governor Patrick Njoroge has hinted an attack against banks which use the credit score to harass customers. In the place, Njoroge advocates for banks using good credit scores for customers to improve their loan eligibility.
Speaking last week during the Monetary Policy Committee (MPC) briefing in Nairobi, CBK Governor Patrick Njoroge said he hoped some of the firms operating mobile phone loan applications would be de registered, “as they are simply fancy shylocks.”
“There has to be a proper regulation, where similar products are regulated in a similar way so long as you are lending to customers or receiving deposits. If you have a banking function, it’s not just about the name; you have to be regulated in the same way or it will lead to arbitrage,” said Dr Njoroge.
However, the leading digital lenders in the country have announced the launch of the Digital Lenders Association of Kenya (DLAK) barely a week after the Banking Charter came into effect with the objective of setting standards in the financial sector.
Safaricom CEO Bob Collymore has brought to a stop the giant Telecommunication Company’s succession debate with his Thursday afternoon announcement.
Speaking in a Press Conference at a popular Nairobi hotel, Collymore said he will remain Safaricom CEO until 2020.
He added that his term extension was because of his medical leave that lasted about a year.
His tenure was expected to end in August this year.
More to follow.
Kenya Commercial Bank is buying 100 percent of National Bank in yet another milestone set to shift the state of the banking sector in Kenya according to CMA.
KCB Group has said that an agreement has been reached for it to acquire each share of National Bank of Kenya (NBK) at 4.19 shillings per share.
National Bank of Kenya has been struggling to remain afloat with the burden of massive losses heavily weighing it down coupled with cases of corruption and fraud.
The buying of National Bank by KCB Group comes a few months after the group offered to acquire the defunct Imperial Bank with the transaction having already been completed.
The deal between KCB Group and National Bank will be completed by creating and issuing new 147.3 million shares to investors of National Bank, “taking into account the two bank’s average share price in the 180 trading days ending mid-March.”
Currently, KCB Shares are trading at 41.9 shillings per share and the lender has been featuring among the top movers of the day at the Nairobi Securities Exchange.
NBK share closed at 4 shillings on Thursday but the average price over the period stood at 5.64 shillings per share. KCB Group is buying the share at a discount of 1.45 shillings per share at 4.19 shillings instead of the average 5.64 shillings.
KCB Chief Executive Officer Joshua Oigara. PHOTO| FILE
“The proposed transaction will further consolidate the banking sector in Kenya and will create stronger institutions enabling KCB to play a bigger role in the financial inclusion agenda. The acquisition would accelerate the Group’s growth ambitions and enhance value to all stakeholders,” said Mr. Oigara when the lender first made an offer.
In April, the Central Bank of Kenya (CBK) and Kenya Deposit Insurance Corporation (KDIC) announced the acceptance of the Final Offer from KCB, which further enhances recovery for depositors.
In letters dated March 29 and April 2, 2019, KCB communicated to CBK and KDIC a modification of the terms of the Binding Offer with respect to the completion of the verification of the loan process.
CBK and KDIC, in the December 2018 announcement, had announced a release of funds increasing a total recovery to approximately 35 percent of original eligible deposits held at the date of receivership.
Funds were previously made available in three tranches, and approximately 92 percent of eligible depositors had been granted full access to their balances. The accepted Final Offer includes a further recovery of 19.7 percent of eligible depositor balances remaining at IBLR.
It was a relief for importers of second hand vehicles after the government suspended plans to cap the age limit for imported second-hand cars at five years from the current 8.
While appearing before the Trade and Industries committee of the National Assembly, Trade CS Peter Munya the cap was a proposal.
“It is still in its draft form and yet to undergo public participation,” he said.
This was after the legislators aired concerns that the ministry was making policies without involving them.
They even termed CS Munya’s pronouncement as roadside declaration.
He however assured the lawmakers that the status quo remains until all stakeholders are involved and the policy is passed in Parliament.
The new set of regulations seeks to cap importation of used cars from 8 to five years starting this July.
In 2021, the limit is proposed to be three years and finally zero by the year 2024.
The Kenyan government further wants restriction on importation of second hand vehicles of over 1500cc and exceeding five years from date of manufacturing.
The plan has since been met by strong opposition from dealers who say the business is the economic mainstay for over 2 million people, directly and indirectly.
Some even told off the Kenya Bureau of Standards KeBS technical team on Tuesday saying the proposed national automotive policy is punitive and inconsiderate of their grievances.
Embu County government has secured Habitat Inter trade export market valued at Sh1.2billion annually that will boost farming and trading of horticultural products from the county.
The new venture came as a combined effort between Embu County Department of Agriculture and Habitat Inter-trade company known to deal with farming and trading of horticultural products nationally.
The county recently held a youth Agri business summit and expo hosted in February 2019 that engaged youth in agribusiness through linkages with markets and financial support just after launching the Embu County Youth in Agribusiness Strategy 2019-2023.
It has now embarked on making strategic partnerships to aid in the implementation of the strategy.
Local banana market in Embu county. File
Embu County Governor Martin Nyaga Wambora said the partnership with Habitat Inter Trade will support farming and trading of horticultural products from the county.
“Embu county is endowed with rich soils and adequate rainfall. We are looking forward to the expanded market. I urge the youth to take advantage of this opportunity and reap the benefits. This will go a long way in the creation of jobs and ensure food security under the Big 4 Agenda set by President Uhuru Kenyatta”, the governor said.
He further noted that Habitat Inter Trade will get into farming contacts with the youth and provide a reliable market for all agricultural produce whereby the payment terms are cash on delivery.
Farmers get free avocado seedlings in Embu county. FILE
“I also encourage the youth to take advantage of the Sh80 million county revolving fund to set up agribusiness enterprises and take part in agricultural value chains under the new market structure, “said Wambora.
The county’s Agriculture Executive Anne Nyaga noted the partnership will open limitless opportunities for the youth and provide incentives for more young people to earn a living from agribusiness.
She said the market guarantee by Habitat for Trade was a show of trust and confidence in the ability of Embu County Department of Agriculture in its ability to marshal resources and compete nationally and internationally.
The key agricultural products under the new market opportunity include tomatoes, onions, capsicum, cabbages, potatoes, sweet potatoes, chilies, kales, spinach, butternut, cucumbers, lettuce, bananas, lemons, passion fruit, pawpaw, avocado, mangoes, oranges, and watermelon.