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KCB and NBK material announcement
Rank: Member Joined: 8/6/2018 Posts: 299
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VituVingiSana wrote:KaunganaDoDo wrote:Ericsson wrote:KCB intends to acquire 100% of the ordinary shares with a par value of Ksh.5 of National Bank of Kenya.
The offer shall be a way of a share swap of 10 ordinary shares of NBK shares for every 1 ordinary share of KCB. Is a good deal for both KCB and NBK....Though its the NBK shareholders to laugh all the way to the bank...KCB will have to recapitalize by way off injecting new Capital into NBK...Its a winner takes all. With new capital, and increased deposits through GOVERNMENT SINGLE TREASURY ACCOUNT, NBK will lend and lend and lend .... Not really. It is likely that NBK's business will be absorbed into KCB rather than NBK being run as a separate bank with fresh capital. NBK will probably become a subsidiary but will remain "open" (as a firm not an operating bank) as it pursues defaulters. I&M still has Giro as a "subsidiary" but I think that's to keep the continuity for legal reasons e.g. for an ongoing lawsuit. Defaulters would go to court to fight a change in the name of the plaintiff from NBK to KCB. Many of our courts/judges are weird or ignorant in commercial matters. In the initial stages, KCB Group will operate two banks ,KCB and NBK. Delisting doesn't mean deleting. KCB Group will transfer some of financial muscles from KCB bank to NBK...to fill capital adequacy requirements... This could be over 13 billion shillings
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Rank: Member Joined: 8/6/2018 Posts: 299
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VituVingiSana wrote:KaunganaDoDo wrote:Ericsson wrote:KCB intends to acquire 100% of the ordinary shares with a par value of Ksh.5 of National Bank of Kenya.
The offer shall be a way of a share swap of 10 ordinary shares of NBK shares for every 1 ordinary share of KCB. Is a good deal for both KCB and NBK....Though its the NBK shareholders to laugh all the way to the bank...KCB will have to recapitalize by way off injecting new Capital into NBK...Its a winner takes all. With new capital, and increased deposits through GOVERNMENT SINGLE TREASURY ACCOUNT, NBK will lend and lend and lend .... Not really. It is likely that NBK's business will be absorbed into KCB rather than NBK being run as a separate bank with fresh capital. NBK will probably become a subsidiary but will remain "open" (as a firm not an operating bank) as it pursues defaulters. I&M still has Giro as a "subsidiary" but I think that's to keep the continuity for legal reasons e.g. for an ongoing lawsuit. Defaulters would go to court to fight a change in the name of the plaintiff from NBK to KCB. Many of our courts/judges are weird or ignorant in commercial matters. In the initial stages, KCB Group will operate two banks ,KCB and NBK. Delisting doesn't mean deleting. KCB Group will transfer some of financial muscles from KCB bank to NBK...to fill capital adequacy requirements... This could be over 13 billion shillings
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Rank: Member Joined: 9/27/2006 Posts: 505
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So book value isn't coming into play in this merger?
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Rank: Chief Joined: 1/3/2007 Posts: 18,346 Location: Nairobi
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KaunganaDoDo wrote:VituVingiSana wrote:KaunganaDoDo wrote:Ericsson wrote:KCB intends to acquire 100% of the ordinary shares with a par value of Ksh.5 of National Bank of Kenya.
The offer shall be a way of a share swap of 10 ordinary shares of NBK shares for every 1 ordinary share of KCB. Is a good deal for both KCB and NBK....Though its the NBK shareholders to laugh all the way to the bank...KCB will have to recapitalize by way off injecting new Capital into NBK...Its a winner takes all. With new capital, and increased deposits through GOVERNMENT SINGLE TREASURY ACCOUNT, NBK will lend and lend and lend .... Not really. It is likely that NBK's business will be absorbed into KCB rather than NBK being run as a separate bank with fresh capital. NBK will probably become a subsidiary but will remain "open" (as a firm not an operating bank) as it pursues defaulters. I&M still has Giro as a "subsidiary" but I think that's to keep the continuity for legal reasons e.g. for an ongoing lawsuit. Defaulters would go to court to fight a change in the name of the plaintiff from NBK to KCB. Many of our courts/judges are weird or ignorant in commercial matters. In the initial stages, KCB Group will operate two banks ,KCB and NBK. Delisting doesn't mean deleting. KCB Group will transfer some of financial muscles from KCB bank to NBK...to fill capital adequacy requirements... This could be over 13 billion shillings That's normally the case i.e. run them as 2 banks for a little while but the endgame is to absorb the smaller/weaker bank. Stanbic - CFC I&M - Giro SBM - Chase Why transfer 13bn to NBK when KCB can backstop NBK. CBK will be OK with this arrangement as long as KCB offers guarantees. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 12/4/2009 Posts: 10,804 Location: NAIROBI
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omega wrote:KaunganaDoDo wrote:shocks wrote:bartum wrote:muganda wrote:Nairobi Securities Exchange has today morning stopped trading in KCB Group and National Bank shares over a material announcement affecting the two counters. Is KCB planning to buy National Bank? https://www.the-star.co....g-to-buy-national-bank/ In the period ending December 31, 2018 National Bank reported a 98.3 per cent drop in profit How will this affect value of kcb, i have a material holding Figures to watch out for is the non performing loans and the costs. Assuming a large part of the non performing loans are written off, KCB will only get about 90billion in extra assets vs customer deposits of 98 biliion. Income side they are getting nothing. How fast will they cut costs on the N.B.K side and at what cost is the question. Share dilution isn't much, about 1% if you consider ordinary shares. How will prefence shares be handled? Conversion of the NBK outstanding stock of preference shares 1,135,000,000 is proposed to be 1 for 1 ordinary shares as per the offer.. So total NBK issued shares will be 1,443,000,000 (1,135,000,000 + 308,000,000) after preference shares conversion. This means KCB will issue 144,3000,000 shares to acquire the whole NBK. Given that KCB total issued shares is about 3 billion, this represents a dilution of about 4.8 percent. It is 1,135,000,000+338,800,000=1,473,800,000 Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Rank: Elder Joined: 12/4/2009 Posts: 10,804 Location: NAIROBI
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VituVingiSana wrote:KaunganaDoDo wrote:VituVingiSana wrote:KaunganaDoDo wrote:Ericsson wrote:KCB intends to acquire 100% of the ordinary shares with a par value of Ksh.5 of National Bank of Kenya.
The offer shall be a way of a share swap of 10 ordinary shares of NBK shares for every 1 ordinary share of KCB. Is a good deal for both KCB and NBK....Though its the NBK shareholders to laugh all the way to the bank...KCB will have to recapitalize by way off injecting new Capital into NBK...Its a winner takes all. With new capital, and increased deposits through GOVERNMENT SINGLE TREASURY ACCOUNT, NBK will lend and lend and lend .... Not really. It is likely that NBK's business will be absorbed into KCB rather than NBK being run as a separate bank with fresh capital. NBK will probably become a subsidiary but will remain "open" (as a firm not an operating bank) as it pursues defaulters. I&M still has Giro as a "subsidiary" but I think that's to keep the continuity for legal reasons e.g. for an ongoing lawsuit. Defaulters would go to court to fight a change in the name of the plaintiff from NBK to KCB. Many of our courts/judges are weird or ignorant in commercial matters. In the initial stages, KCB Group will operate two banks ,KCB and NBK. Delisting doesn't mean deleting. KCB Group will transfer some of financial muscles from KCB bank to NBK...to fill capital adequacy requirements... This could be over 13 billion shillings That's normally the case i.e. run them as 2 banks for a little while but the endgame is to absorb the smaller/weaker bank. Stanbic - CFC I&M - Giro SBM - Chase Why transfer 13bn to NBK when KCB can backstop NBK. CBK will be OK with this arrangement as long as KCB offers guarantees. Did I&M bank pump money into Giro or they just absorbed and rebranded the bank. Why pump 13bn yet in the end that entity will be shut down Exactly KCB will just backstop NBK.Several branches will Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Rank: Chief Joined: 1/3/2007 Posts: 18,346 Location: Nairobi
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What KCB-NBK merger means https://www.businessdail...78268-qlspa1z/index.htmlGreedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Member Joined: 8/6/2018 Posts: 299
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VituVingiSana wrote:KaunganaDoDo wrote:VituVingiSana wrote:KaunganaDoDo wrote:Ericsson wrote:KCB intends to acquire 100% of the ordinary shares with a par value of Ksh.5 of National Bank of Kenya.
The offer shall be a way of a share swap of 10 ordinary shares of NBK shares for every 1 ordinary share of KCB. Is a good deal for both KCB and NBK....Though its the NBK shareholders to laugh all the way to the bank...KCB will have to recapitalize by way off injecting new Capital into NBK...Its a winner takes all. With new capital, and increased deposits through GOVERNMENT SINGLE TREASURY ACCOUNT, NBK will lend and lend and lend .... Not really. It is likely that NBK's business will be absorbed into KCB rather than NBK being run as a separate bank with fresh capital. NBK will probably become a subsidiary but will remain "open" (as a firm not an operating bank) as it pursues defaulters. I&M still has Giro as a "subsidiary" but I think that's to keep the continuity for legal reasons e.g. for an ongoing lawsuit. Defaulters would go to court to fight a change in the name of the plaintiff from NBK to KCB. Many of our courts/judges are weird or ignorant in commercial matters. In the initial stages, KCB Group will operate two banks ,KCB and NBK. Delisting doesn't mean deleting. KCB Group will transfer some of financial muscles from KCB bank to NBK...to fill capital adequacy requirements... This could be over 13 billion shillings That's normally the case i.e. run them as 2 banks for a little while but the endgame is to absorb the smaller/weaker bank. Stanbic - CFC I&M - Giro SBM - Chase Why transfer 13bn to NBK when KCB can backstop NBK. CBK will be OK with this arrangement as long as KCB offers guarantees. The reason NBK has been unable to loan out iits huge deposits is because your it was in breach of capital ratios, The loans you issues will depend on your capital adequacy limits....Now KCB taking NBK , KCB will have to increase its own capital in order to lend more Deposits coming with NBK (if the bbanks merge) or recapitalise NBK of continue to operate as a bank
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Rank: Elder Joined: 6/23/2009 Posts: 14,211 Location: nairobi
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Bad for short term, excellent for the long term game
KQ ABP 4.26
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Rank: Elder Joined: 12/4/2009 Posts: 10,804 Location: NAIROBI
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Ericsson wrote:Ericsson wrote:KaunganaDoDo wrote:shocks wrote:bartum wrote:muganda wrote:Nairobi Securities Exchange has today morning stopped trading in KCB Group and National Bank shares over a material announcement affecting the two counters. Is KCB planning to buy National Bank? https://www.the-star.co....g-to-buy-national-bank/ In the period ending December 31, 2018 National Bank reported a 98.3 per cent drop in profit How will this affect value of kcb, i have a material holding Figures to watch out for is the non performing loans and the costs. Assuming a large part of the non performing loans are written off, KCB will only get about 90billion in extra assets vs customer deposits of 98 biliion. Income side they are getting nothing. How fast will they cut costs on the N.B.K side and at what cost is the question. Share dilution isn't much, about 1% if you consider ordinary shares. How will prefence shares be handled? Conversion of the NBK outstanding stock of preference shares 1,135,000,000 is proposed to be 1 for 1 ordinary shares as per the offer.. Paste here the offer document. NBK said the offer was conditional on it delisting its shares from the Nairobi Securities Exchange and converting its preference shares into ordinary shares. If the conversion of preference shares is as above,then it means prior to the acquisition GoK will be the majority shareholder in NBK and not NSSF. The par value of Treasury’s portion of the preference shares is Sh4.5 billion with NSSF’s claim at about Sh1.2 billion, adding up to a total of Sh5.7 billion. Gok Owns 79% of the Preference shares and NSSF 21% When NBK was bailed out in 2003, long-term loans worth Sh5.675 billion from NSSF and Treasury were converted to preference shares. The Treasury holds 900 million while NSSF has 235 million, or a fifth, of the special stocks valued at five shillings each. Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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