KCB Group has injected Sh 5 billion in its newly acquired subsidiary National Bank of Kenya (NBK) adding to the Sh 6 billion it paid to shareholders after the completion of the takeover in September 2019. This capital injection enables NBK to comply with capital requirements as set by the regulator Central Bank of Kenya (CBK).
In a statement, NBK said the funds will not only help it meet the regulatory requirements but also bolster its financial resources.
NBK has struggled to meet its capital requirements and has recorded poor performances over the years. As at September 2019, its Non-Performing Loans (NPL) stood at sh 32 billion rising from Sh 27 billion at the end of March the same year.
The bank’s newly appointed chief executive officer, Paul Russo had said the lender was pursuing some top 30 debtors who owed it about Sh 22 billion.
KCB Group decided to let NBK operate autonomously so as to avoid its brand from suffering from the bad publicity NBK had attracted over the years. NBK’s gross non-performing loans is projected to drop to 20 percent in 2020 and 10 percent in 2023.
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