Kenya’s green light alone wasn’t enough to seal the deal. While the Central Bank of Kenya (CBK) and treasury gave its blessing for KCB Group to sell National Bank of Kenya (NBK) to Nigeria’s Access Bank, the much-anticipated transaction remains in a holding pattern.
The missing piece? Approval from Nigeria’s central bank, and it’s proving to be far more complex than expected.
At the heart of the delay are regulatory hurdles set by the Central Bank of Nigeria (CBN), which has tied its decision to two non-negotiable conditions.
First, Access Bank must divest from its operations in the Democratic Republic of Congo (DRC). Second, it must undergo a compliance review of its UK-based subsidiary in London.
Until both issues are resolved to the CBN’s satisfaction, the cross-border acquisition remains stuck in limbo.
A Strategic Sale Under Pressure
The sale of NBK is part of a broader strategy by KCB Group to streamline its operations and exit non-core or underperforming assets.
Despite NBK posting a return to profitability in 2024, the bank still falls behind on critical regulatory benchmarks,particularly its core capital ratio, which remains below the required minimum. This has placed ongoing pressure on KCB, prompting it to accelerate its exit.
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However, the deal is not a blanket acquisition. Access Bank has agreed to take over select assets and liabilities, while KCB will retain responsibility for problematic or non-performing loans.
This particular deal structure is designed to make the transaction more attractive to the buyer while allowing KCB to offload NBK’s viable components.
Access Bank’s Expansion Strategy Hits a Wall
For Access Bank, the acquisition of NBK is a strategic move in its aggressive push to establish a stronger footprint in East Africa.
Having already acquired Kenya’s Transnational Bank, Access Bank views NBK, a mid-sized lender with national reach, as a crucial platform for scaling up in the region.
The deal, valued at KES 16.2 billion, is part of a larger expansion initiative supported by a $228 million capital injection raised earlier this year.
However, the CBN’s insistence on a DRC exit is a major roadblock. Nigerian banks, including Access Bank, have struggled to generate strong returns in the DRC, a market where their Kenyan counterparts have thrived.
Equity Bank and KCB Group, for instance, have turned their DRC ventures into billion-shilling profit centres. In contrast, Access Bank’s footprint in the country has produced only modest returns, raising questions about long-term viability.
The Nigerian regulator’s caution reflects deeper concerns about risk exposure, foreign exchange volatility, and political uncertainty in some African markets.
By pushing Access Bank to consolidate and clean house, the CBN is signalling a more conservative posture amid rising cross-border banking risks.
The London Factor: Compliance Matters
Alongside the DRC issue, CBN’s demand for a compliance review of Access Bank’s London operations adds another layer of complexity.
While the specific concerns have not been made public, the move underscores the increasingly global nature of regulatory scrutiny.
With international regulators tightening anti-money laundering and governance standards, banks with foreign subsidiaries must meet stricter benchmarks.
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The Bottom Line
Kenya’s stamp of approval was a significant milestone, but it’s not the final word. Until Access Bank satisfies Nigeria’s central bank on both its DRC divestment and UK compliance status, the NBK acquisition remains suspended.
For KCB, the delay prolongs an exit they’ve already begun to price in. For Access Bank, it’s a test of patience and strategic alignment across multiple regulatory regimes.
