NAIROBI, July 31 – The privatisation of the National Bank of Kenya formally began Thursday after the Cabinet approved a proposed Initial Public Offering of 40 percent of its shares through the Nairobi Stock Exchange.
The Cabinet further authorised a two-phased restructuring of the Bank that would lead to the entry of a strategic investor and off-loading of additional shares to the Kenyan public.
The first phase is meant to strengthen the bank’s management and capital base.
The second phase of the restructuring will involve the sale of 17 percent of government shares, and 23 percent of shares held by the National Social Security Fund (NSSF), through a public share issue on the Nairobi Stock Exchange.
Meeting under the chairmanship of President Mwai Kibaki on Thursday, the Cabinet authorised that with concurrence from the NSSF board there would be a sale of 25 percent shares to a strategic investor.
The bank is out of the woods and has returned to profitability, which has seen it reduce its loan loss provision from Sh2.3 billion in 2006 to Sh595 million last year.
In March 2008, the Bank’s Managing Director Reuben Marambii disclosed that for the first time they had recorded a 79 percent increase in profit after tax, from Sh624 million to Sh1.1 billion.