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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.