Money Markets
NBK investors’ wait pays off with bonus share issue
Customers inside an National Bank of Kenya banking hall. NBK recorded Sh2.1 billion in pre-tax profits last year compared to Sh1.7 billion in 2008. Photo/FILE
Posted Friday, March 12 2010 at 00:00
But with NBK now straddling a healthy balance sheet, potential suitors for the bank are likely to take a keener interest in the bank.
NBK is among state-owned institutions that are being lined up for privatisation this year.
The proposed privatisation of the bank-the oldest government owned bank in Kenya-has drawn some controversy with the privatisation commission accusing Equity bank’s CEO James Mwangi of making statements implying that Equity had already clinched a deal to buy the bank.
Because of its extensive branch network, especially in rural areas, National Bank has emerged as a prime target for most financial institutions eager to expand to the countryside.
Past suitors have included the Standard Bank of South Africa which expressed an interest in 2005.
NBK’s share price closed at Sh50 yesterday after gaining 55.56 per cent over the past one year.
The National Social Security Fund owns 48 per cent of National Bank, its biggest single shareholder, while the government has a 23 per cent stake.
The bank’s cleaner balance sheet is bound to endear investors to state-owned bank’s shares which have long been shunned as poor yielding investment.
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