NSSF, Treasury to give National Bank Sh4.2b capital
NAIROBI, KENYA: National Bank of Kenya (NBK) is set for a capital boost after key shareholders committed to pumping in Sh4.2 billion.
The bank confirmed yesterday that National Social Security Fund (NSSF), which owns 48.06 per cent, and National Treasury (22.5 per cent), had agreed to recapitalise the bank in the next six months.
Billions paid to firm without NSSF’s approval
The news came on the back of NBK restating its 2016 books to post a Sh410 million profit in 2017.
While in its original results for 2016 the bank had made a profit of Sh162.2 million, it has restated the books to trim the profit by 56.3 per cent.
The lender said Treasury had written to Central Bank of Kenya, making the commitment to provide a long-term solution on the capital position to help meet statutory requirements.
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The capital injection will be in the form of a subordinated loan to boost tier II capital.
The letter indicates that the core capital injection will be fast-tracked and is expected to be completed within six months.
NBK Managing Director Wilfred Musau said in a statement the capital injection would bolster the lender’s focus on improving customer transactions and managing operational and market risks.
“The solid commitment made by our major shareholders to tackle the recapitalisation is an overt approval of the measures taken in the financial year under review to sustain growth.”
During the period under review, the bank’s net interest income fell by 14 per cent to Sh6.7 billion to reflect the impact of reduced margins due to the interest rate cap regime.