Road Clears for Access Bank’s Acquisition of Kenya’s Transnational Bank

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SWITZERLAND, OCTOBER 28 – The Central Bank of Kenya (CBK) has granted Access Bank, one of Nigeria’s largest banks, approval to acquire Kenyan lender, Transnational Bank.

According to Bloomberg News, CBK approved the planned takeover on Friday, October 25th, 2019, as part of an effort to consolidate the nation’s banking industry.

When completed, the deal will see Access Bank taking over 93.57% of the bank’s assets.

Transnational Bank is one of Kenya’s tier-4 banks and posted 58% jumped in non-performing loans to ($17.85 million) 1.85 billion Kenyan Shillings last year from Kshs. 1.17 billion. In 2018, Transnational Bank posted a loss of $693,904, about 71.8 million Kenyan Shillings, according to its financial statement.

Analysts believe, just like Diamond Bank, which Access acquired early in the year, Transnational Bank is enmeshed in non-performing loans that threaten its stability, prompting its management to be ready for sale.

Read also: Today’s Echo Exclusive: Diamond Bank’s Fall and Lessons for Family Businesses in Nigeria

The deal, which comes exactly seven months after Access Bank successfully consummated a business combination deal with the defunct Diamond Bank would see the bank expand its footprint in Africa.

The Managing Director/Chief Executive Officer, Access Bank Plc, Mr. Herbert Wigwe, confirmed the development in a telephone chat on Sunday, according to Thisday.

He anticipated that the deal would be finalised before the end of next week.

Wigwe said Access Bank would formerly notify the Nigerian Stock Exchange (NSE) today (Monday).

According to him, the acquisition aligns with Access Bank’s strategic vision.

He said: “We are going to issue a statement on the Nigerian NSE tomorrow (today). Kenya is a big market in Africa, it is a major trade route and major payment corridor.

“This aligns with our strategic vision. We have our own regulatory and board approvals. In Kenya, the bank is going through its own regulatory process. But the deal is imminent, so it could happen this week or next week.”

It was gathered that the Access Bank would acquire 93.57 per cent stake in the Kenyan bank as it seeks to consolidate its presence in the continent.

Access Bank would now join GT Bank and the United Bank for Africa Plc, two other Nigerian banks with presence in the Kenyan market.

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