Nigerian lender Access Bank paid Ksh1.4 billion to acquire cash strapped Transnational Bank, it has emerged.
The Central Bank of Kenya (CBK) had approved acquisition of Transnational Bank by Access Bank early this year, though it was not yet clear the amount involved in the transaction.
This now paves way for the lender to inject capital into the bank as it seeks to return to profitability.
“It will be paid for in cash so we have taken out the existing shareholders and we will basically inject a bit more equity into the institution,” Mr Wigwe said.
The transaction is said to have happened last year at undisclosed amount and was approved by the Competition Authority of Kenya (CAK), but was awaiting CBK’s nod, which happened in January.
At first, the transaction entailed transfer of 93.57 per cent stake in Transnational Bank to Access Bank, but has now gone up to 97 percent.
The 35-year-old Kenyan bank with 28 branches is co-owed by Moi family, Joshua Kulei, Simeon Nyachae and the late former Vice President George Saitoti.
Kulei, a former aide to ex-President Daniel Moi owns 23.03 percent stake in the lender, Simeon Nyachae has 8.2 million shares or 4.11 percent of the bank while Losupuk Ltd, a company associated with Saitoti, holds 2.79 per cent.
Transnational had 18 corporate shareholders (51.4 percent) and 17 individual shareholders with a stake of 48.6 percent
The entry of Access Bank in the Kenyan market adds to other two Nigerian banks in the market including United Bank of Africa (UBA) and Guarantee Trust Bank.
Transnational Bank owns assets worth Ksh10.2 billion but made a loss of Ksh71.8 million in the financial year ended December 2018, down from a profit of Ksh36.4 million in the previous year.
On the other hand, Access Bank has assets worth Ksh1.17 trillion and enjoys presence in Gambia, Sierra Leone, Ghana, Congo, Zambia, China and the UK.
The bank made a profit of Kh17.69 billion in the financial year ended December 2017.