The demand that Access Bank sell a 45 percent stake in its Democratic Republic of Congo (DRC) is at the centre of the stalled sale of the National Bank of Kenya (NBK) to the Lagos-headquartered lender.
KCB Group, which is selling NBK, said earlier that the Central Bank of Nigeria (CBN) had placed a condition for Access Bank to review its ownership of the DRC unit before closing the Kenya deal.
Access Bank on Tuesday said it was working to comply with the DRC regulatory requirement for all banks in the country to have at least 45 percent local ownership.
The Nigerian bank reckoned it is in the process of cutting its ownership from 99.98 percent in Access Bank R.D. Congo before the December 2026 deadline.
Access Bank, however, remained guarded on linking the lack of approval from Nigeria’s central bank for its purchase of NBK to the unsettled DRC ownership.
“Our commitment to the DRC remains steadfast, we are fully aligned with the regulatory requirements established by the Central Bank of Congo (BCC) which stipulate that all banks in the country must have a minimum of 45 percent local or minority shareholding,” said Access Bank in an email response to the Business Daily.
“We have no further comment,” added the lender when asked if the Kenyan deal will proceed after the sale of the Access Bank R.D. Congo shares.
The CBK approval for the sale of NBK to the Nigerian banking giant came on Friday, removing the first hurdle in closing the multi-billion-shilling acquisition.
“While we are in a position to disclose specific details regarding the remaining steps, we can confirm that the process is progressing following established regulatory expectations,” said Access Bank.
The Lagos-headquartered bank entered the DRC market in 2009 through a buyout of Banque Privee du Congo (BPC).
The bank, which has branches across the DRC, including in Kinshasa, Goma and Lubumbashi, made a profit of Sh563.3 million.
The relative success of Kenyan banks in the DRC is partly attributable to their acquisition of stronger and more profitable brands in the Congo, in contrast with their Nigerian counterparts.
Equity acquired Banque Commerciale du Congo (BCDC)—a significant lender in the DRC—from the family of businessman George Forrest in 2020, adding to its already existing unit of Equity Bank Congo, which was born out of the acquisition of German bank ProCredit previously.
The subsidiary posted a profit of 12.1 billion in 2023.
KCB recently acquired the Trade Merchant Bank (TMB) in the DR Congo and made a net profit of Sh6.27 billion in 2023 from the subsidiary.
In March, KCB Group linked the delay in selling NBK to Access Kenya on two conditions, including CBK approval and Nigerian lender's divestitures in the DRC.
“They (Access Bank) got a no objection but with a condition that they had to comply with. It was a condition for CBK’s approval and also a condition for some divestiture, and I think it must be in DR Congo and London, which they are at advanced stages,” said KCB Group Chief Executive Officer Paul Russo.
Under the deal, some undisclosed assets and liabilities of NBK will not be transferred to Access Bank, possibly leaving KCB Bank with some problematic loans. NBK was also known as a banker for government entities.
KCB remained guarded on the items to be transferred from the subsidiary, saying it would disclose the assets and liabilities at the deal’s close.
Kenya's second-biggest lender bought NBK, a medium-sized bank that was then controlled by the State, in a rescue deal engineered by the central bank in 2019.
Access Bank has operations in 23 countries after an aggressive growth into new markets.
It is Nigeria's biggest lender by assets and in December raised $228 million in a rights offer to boost its capital above a new regulatory threshold as it embarks on an expansion plan.
The lender’s share capital — at 600 billion naira — rose 20 percent above the minimum required for international banks operating in the West African country.
The fundraising will help Access Bank, controlled by Access Holdings Plc, accelerate its expansion into new markets, including Morocco, Egypt and the US, and double the share of assets outside its home market by 2027.
In Kenya, Access already runs a small bank after another acquisition of Transnational Bank from the Moi family.
It hopes to ride on NBK to expand in the country and take advantage of growing trade in the region.
KCB had initially indicated it was invested in NBK for the long haul. However, narrowing capital adequacy ratios in the last two years may have prompted a rethink.
NBK's core capital to risk-weighted asset ratio as at 9.0 percent in December, below the minimum requirement of 10.5 percent.
