Kenya: NCBA Offered Better Investment, Nedbank CEO Says

Nairobi — Nedbank CEO Jason Quinn has said that Kenya's strong regulatory environment and growing economy were among the reasons behind the lender's decision to offer to acquire a majority stake in NCBA Group.

In an interview on NTV, Quinn also said that NCBA is a well-run bank.

"If you think about Kenya... there are so many things that are going well here with respect to not only growth in the economy, good governance, strong regulatory oversight... and then... the entry point of NCBA for me is a very well-run bank," Quinn stated.

"You know, a bank that has a great strategy, a great leadership team, a great board... it was a natural fit... to be able to execute a transaction with NCBA in Kenya, which we think is foundational."

Last month, South African lender Nedbank Group submitted a tender offer to acquire roughly 66 percent of NCBA Group's ordinary shares, which, if successful, would give Nedbank a controlling stake in the Kenyan financial services provider.

The remaining 34 percent of NCBA shares would continue trading on the Nairobi Securities Exchange (NSE).

The proposed acquisition values NCBA at 1.4 times its book value. Shareholders who accept the tender offer would receive 20 percent of their consideration in cash, with the remaining 80 percent paid through Nedbank ordinary shares listed on the Johannesburg Stock Exchange (JSE).

Quinn also said that the decision to sell its 22 percent stake in Ecobank was influenced by challenges in extracting dividends from West Africa, especially Nigeria, as well as its smaller shareholding, which curtailed control of the bank.

"So although hugely supportive of Ecobank's leadership... it became more appropriate for us to invest our capital in businesses we could own or control. And to be fair also... West Africa is a little bit more difficult to extract returns out of, and the track record of dividend distribution coming out of Ecobank, particularly in West Africa, particularly in Nigeria, was problematic."

Read the original article on Capital FM.