Companies

Nigerian bank Access invests Sh3bn in Kenya unit after Moi allies deal

transnational

A customer at a Transnational Bank branch in Nairobi. The bank was renamed Access Bank after its sale in July 2020. FILE PHOTO | NMG

Nigerian lender Access Bank Group has disclosed a Sh3.29 billion (11.61 billion) investment in the Kenyan unit after buyout from the late President Daniel Moi allies last year.

The investment came after Access Bank Group acquired 99.98 per cent stake of the then Transnational Bank in July last year at a total cash consideration of Sh1.49 billion (5.63 billion).

The lender renamed Transnational into Access Bank Kenya, which now trades as one of its 11 subsidiaries spread in Africa, and is seeking expansion and launch into new business lines.

The injection comes at a time the lender wants to strengthen the ratios of the lower-tier bank, launch into new counties, introduce fresh business lines and return it into profit territory.

Access Bank Group managing director Herbert Wigwe downplayed the Sh2 billion net loss posted by the Kenyan unit last year, up from Sh56.2 million in the previous period.

“Of course as you know the Kenyan subsidiary only just started. What we have done is maybe some of the provisions coming from the prior Transnational Bank have been taken,” said Mr Wigwe.

Top owners of the 36-year-old Kenyan bank with 28 branches were companies owned by close associates of the late Moi, including Joshua Kulei, Simeon Nyachae and the former vice president George Saitoti.

Access Bank Kenya wants to launch into nine new counties this year as it sets eyes on acquiring more customers and serving new areas such as trade financing, SME lending and corporate banking.

Five counties — Kiambu, Meru, Machakos, Kisumu and Nyeri — will be given priority, followed by Nyandarua, Kakamega, Bungoma and Kisii.

Mr Wigwe said in October the expansion aligns with the group strategy to become Africa's gateway to the world.

“We are excited about the potential that exists in the East African market. We will leverage our presence in key payment corridors, and strong partnerships in non-presence countries to serve customers,” he said.

The expansion will see the bank reach 21 counties from the current 12 that are served by 24 branches.

Nairobi has the most branches (five) followed by Nakuru (four) and Uasin Gishu (three). Mombasa and Nandi have two branches each while the remaining seven counties have one each.

Access Bank says the entire buyout deal was supposed to cost a total of Sh1.62 billion (4.23 billion) but it received a discount.