Nairobi - Kenya’s
biggest bank by assets offered to buy a state-owned lender as the industry
struggles to cope with interest-rate caps that have cut profits and curbed
lending.
KCB Group provided an expression of interest to the Treasury
to acquire a controlling stake in National Bank of Kenya, Judith Odhiambo, a spokeswoman
for Nairobi-based KCB, said in an emailed response to questions on Monday.
“Further details
will, however, be provided in due course in line with the guiding regulatory
requirements,” she said.
Shares of National Bank, or NBK, jumped 10 percent, the most
on a closing basis since July 2015, to 7.7 shillings by 1:02 p.m. in Nairobi, valuing the company
at 2.37 billion shillings [$23 million]. About 6 600 shares changed hands, less
than 34 percent of the three-month daily average. KCB dropped 3.1 percent to
38.75 shillings for a market value of 118.8 billion shillings.
Read also: State-owned bank could be in pipeline
The East African nation’s largest banks all posted a drop in
first-quarter earnings as a government-imposed limit on commercial lending
rates reduced what they can charge for loans.
The ceiling on interest rates 400 basis points above the central
bank’s benchmark rate is forcing lenders to compete more aggressively on
pricing for loans and impairing their ability to provide loans to riskier
clients.
KCB had approached National Treasury and National Social
Security Fund, NBK’s largest investors, expressing interest in buying the
lender, Nairobi-based Daily Nation newspaper reported on Saturday, citing
people familiar with the matter. A spokesman at NBK didn’t immediately respond
to emailed questions.
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