A Kenyan High Court Judge has declined to issue conservatory orders suspending the takeover of National Bank of Kenya (NBK) by the Kenya Commercial Bank (KCB).
Justice Weldon Korir refused to temporarily suspend the deal as sought by petitioners Evans Aseto and John Kiptoo and instead certified the matter urgent and directed the petition to be heard on 26th June this year.
The petitioners in their suit argue that “We are apprehensive that the acquisition of 1st respondent by the 2nd respondent will occasion loss of jobs to may Kenyans under the employment of respondents as there is high likelihood that various positions will be declared redundant.”
According to The Business Daily, the National Bank of Kenya (NBK) faces imminent collapse if it is not taken over by KCB Group in the proposed merger of the two lenders, Central Bank of Kenya (CBK) Governor Patrick Njoroge said while appearing before Parliament Tuesday.
“NBK isn’t a small institution and letting it collapse will be disastrous to its over 650,000 customers and the financial sector at large,” Dr Njoroge told the Finance and National Planning Committee of the National Assembly.
“This option is best for shareholders because it strengthens the capital position right away. The next step will be strengthening the business model so it becomes a solid bank,” he said.
In May, KCB Group shareholders approved the acquisition of National Bank of Kenya Limited (NBK) through a share swap.
“For us, the acquisition is an opportunity to strengthen the deposit base and lending capacity, increase cost efficiencies due to economies of scale and boost transactional revenue through leveraging of technology,” said KCB Group Chairman Andrew Wambari Kairu.
