September 2, 2019 / 3:12 PM / 15 days ago

UPDATE 1-Kenya's central bank approves Kenya's KCB Group acquisition of NBK

(Adds background)

NAIROBI, Sept 2 (Reuters) - Kenya’s central bank on Monday approved KCB Group’s acquisition of National Bank of Kenya.

KCB is Kenya’s biggest lender by assets. Lenders in the East African nation have turned to consolidation to boost profit growth after the government capped commercial interest rates in 2016, crimping their margins.

NBK was founded by the government in 1968 but is now listed on the Nairobi Stock Exchange.

KCB, Kenya’s biggest lender by assets, offered to buy struggling National Bank (NBK) in April through a share swap of one KCB share for every 10 shares of NBK.

Lawmakers earlier this month said the government, which is NBK’s biggest shareholder, should reject the offer.

The central bank and the Treasury, together with the state pension fund, hold more than 70% of NBK, have said the takeover is the only way of rescuing NBK from perennial liquidity challenges. (Reporting by George Obulutsa Writing by Maggie Fick Editing by Katharine Houreld and David Evans)

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