: Access Bank to acquire National Bank of Kenya for $100M, boosting market
share to 1.9% with CAK approval and workforce retention conditions.

CAK Approves Access Bank’s Acquisition of NBK with Conditions

The Competition Authority of Kenya (CAK) approved Access Bank’s acquisition of the
National Bank of Kenya (NBK) from KCB Group, requiring Access Bank to retain 80% of
NBK’s workforce for at least one year.
The Central Bank of Kenya (CBK) must now give its final approval for the deal.

Employment Retention Key to Approval

According to CAK, Access Bank must maintain 80% of NBK’s 1,384 employees and all
316 staff from its local subsidiary, Access Bank Kenya, for a year following the
transaction’s completion. “The transaction has been approved on condition that Access
Bank Plc retains, for one year, at least 80% of the target’s current workforce,” CAK
stated.

Deal Valuation and Finalization Timeline

While the deal’s value has not been disclosed, KCB Group announced in March 2024
that NBK would be sold for 1.25 times its book value. With NBK’s 2023 book value at
$79.77 million, the acquisition is estimated to be worth approximately $100 million. The
transaction is expected to conclude in November.

Expanding Access Bank’s Kenyan Presence

Access Bank’s current footprint in Kenya includes 23 branches in 12 counties. Acquiring
NBK’s 77 branches across 28 counties will significantly boost its presence and service
offerings, including retail, corporate, and Islamic banking. Access Bank, currently
ranked as a tier 3 lender, will integrate with NBK, a tier 2 institution, enhancing its status
in the market.

Market Share and Competition Analysis

The acquisition will give the merged entity a 1.9% market share in Kenya’s banking
sector. “The combined market size is unlikely to raise competition concerns since it is
low,” CAK noted. “The merged entity will face competition from other banks in the
market. Based on this, the transaction is unlikely to substantially lessen or prevent
competition.”

: The nomination speaks volumes about the bank’s commitment to its African operations and its strategic vision for growth on the continent.

: Kariuki’s vast experience and market insight make him a catalyst for growth. With his strategic vision, Standard Chartered can seize opportunities, expand, and provide tailored financial solutions

In a significant move within the banking sector, Kariuki Ngari ascended to CEO Africa at Standard Chartered Bank on April 3, marking a pivotal moment in his illustrious career. As he steps into this new role, Ngari faces a landscape rife with challenges but brimming with opportunities. He is poised to leverage his expertise and track record to propel the bank’s growth trajectory across Africa.

Challenges and Opportunities:

Navigating Regulatory Complexity: One of Kariuki’s foremost challenges will be navigating the diverse regulatory environments across the African continent. With each country presenting unique regulations and compliance requirements, Ngari must adopt a nuanced approach to ensure Standard Chartered Bank’s operations remain compliant while driving growth.

Adapting to Market Dynamics: African markets are diverse and constantly changing. Rapid shifts in consumer preferences, technological advancements, and intense competition characterise them. Kariuki must stay agile and adaptive, seizing opportunities for innovation and market expansion while mitigating risks associated with changing market dynamics.

Fostering Financial Inclusion: Africa offers significant opportunities for financial inclusion, as a large portion of the population remains underserved by traditional banking services. Kariuki has the opportunity to drive initiatives that promote financial literacy, expand access to banking services, and foster inclusive economic growth across the continent.

Previous Achievements and Experience:

Before assuming the role of CEO of Africa, Kariuki served in various leadership positions within Standard Chartered Bank, demonstrating his exceptional leadership capabilities and strategic vision. Some of his notable achievements include:

Driving Digital Transformation: Kariuki played a pivotal role in driving Standard Chartered Bank’s digital transformation agenda, spearheading initiatives to enhance the bank’s digital capabilities and customer experience. Under his leadership, the bank successfully launched innovative digital banking solutions tailored to the African market, driving customer engagement and retention.

Expanding Market Presence: Kariuk has a proven track record of expanding Standard Chartered Bank’s market presence across Africa, identifying growth opportunities, and forging strategic partnerships to penetrate new markets and strengthen the bank’s foothold in existing ones.

Promoting Sustainable Finance: Kariuki is committed to promoting sustainable finance and responsible banking practices. He has championed initiatives focused on environmental, social, and governance (ESG) principles, integrating sustainability into the bank’s business strategy and operations.

Expectations in the New Role:

As CEO of Africa, stakeholders expect Kariuki to bring his wealth of experience, strategic acumen, and unwavering commitment to driving Standard Chartered Bank’s growth agenda in Africa. Key expectations include:

Strategic Vision: Kariuki will continue articulating a clear vision for Standard Chartered Bank’s African operations, leveraging market insights and industry trends to identify growth opportunities and drive sustainable value creation.

Innovation and Digitalization: Ngari will prioritise innovation and digitalisation, harnessing the power of technology to enhance the bank’s offerings, streamline operations, and deliver superior customer experiences.

Stakeholder Engagement: Ngari will intensely focus on stakeholder engagement, fostering relationships with clients, regulators, shareholders, and communities to ensure alignment with the bank’s objectives and values.

The nomination of Kariuki to the position of CEO of Standard Chartered Africa speaks volumes about the bank’s commitment to its African operations and its strategic vision for growth on the continent. Here are a few critical points that the nomination signifies:

Recognition of Talent: Standard Chartered Bank’s decision to appoint Kariuki Ngari as CEO of Africa reflects the bank’s recognition of his exceptional leadership qualities, strategic acumen, and track record of success within the organisation. It indicates that the bank values talent from within its ranks and is committed to nurturing and promoting internal talent to key leadership positions.

Focus on the African Market: By appointing a CEO specifically for the African region, Standard Chartered Bank underscores the importance of the African market in its global strategy. It signifies the bank’s commitment to unlocking the vast opportunities presented by the African continent and leveraging its potential for growth and expansion.

Continuity and Stability: Kariuki’s nomination brings continuity and stability to Standard Chartered Bank’s African operations. With his deep understanding of market dynamics, extensive experience within the organisation, and proven track record of success, Ngari is well-positioned to provide steady leadership and drive the bank’s growth agenda in Africa.

Emphasis on Local Leadership: The appointment of Kariuki, who is of Kenyan nationality, also highlights the importance of local leadership and expertise in driving success in the African market. It demonstrates Standard Chartered Bank’s commitment to fostering a diverse and inclusive leadership culture that reflects the communities and markets it serves.

Strategic Direction: Kariuki’s nomination signifies the bank’s strategic direction and priorities for its African operations. It suggests a focus on driving innovation, digital transformation, and sustainable growth in key markets across the continent, with Ngari leading the charge in executing the bank’s vision and objectives in Africa.

Kariuki’s appointment as CEO of Africa at Standard Chartered Bank marks a significant milestone in the institution’s journey towards consolidating its position as a premier financial institution on the African continent. With an unwavering focus on excellence, strategic foresight, and a proven track record of leadership, Kariuki brings a wealth of experience and expertise that positions him as a catalyst for transformative growth.

His elevation underscores the bank’s confidence in his abilities and its steadfast commitment to fostering homegrown talent and leveraging local expertise to drive success in key markets. Kariuki’s appointment represents more than just a change in leadership; it symbolises a new era of innovation, resilience, and adaptability in navigating the intricacies of the African financial landscape.

In the face of evolving market dynamics, regulatory complexities, and competitive pressures, Kariuki’s leadership will be instrumental in steering Standard Chartered Bank towards sustainable growth and value creation. His strategic vision, coupled with a deep understanding of the African market, will enable the bank to capitalise on emerging opportunities, expand its footprint, and deliver superior financial solutions tailored to the diverse needs of its customers.

Moreover, Kariuki’s appointment reinforces Standard Chartered Bank’s commitment to driving positive impact and fostering inclusive growth across the continent. Kariuki is poised to make a meaningful difference in millions of individuals and businesses across Africa by championing initiatives promoting financial inclusion, sustainability, and responsible banking practices.

In essence, Kariuki’s nomination heralds not just a new chapter but an entire volume in the bank’s narrative of success in Africa. It signifies a renewed sense of purpose, a reaffirmation of values, and a shared commitment to shaping a brighter future for the continent’s economies and communities. As he assumes the mantle of leadership, Ngari stands at the forefront of Standard Chartered Bank’s journey towards becoming the partner of choice for businesses, investors, and individuals alike, propelling Africa towards a future of prosperity and opportunity.

: As COP29 kicks off on November 11, African nations face increasing pressure to tackle climate adaptation, but their reliance on loans instead of grants is deepening the debt crisis.
 By Prof Carols Lopes

As we approach the global annual climate change conference, COP29, the need for increased public finance from the global north to address climate adaptation in Africa has become more urgent than ever.

However, framing the finance debate solely around this need risks deepening mistrust and downplaying the scale of the challenge. The financial burden of addressing climate change, coupled with limited fiscal space, creates a precarious situation for many African countries. African countries bear no historical responsibility for causing the climate crisis. However, they rely heavily on external financing to solve climate change problems.

Unfortunately, much external climate finance comes from loans rather than grants. This only worsens Africa’s debt burden. There is also not nearly enough money being channelled to Africa to pay for climate change adaptation.

At COP29, African negotiators will undoubtedly focus on reducing dependence on debt, and improving access to finance. I’m an economist who specialises in climate change and governance, with a long background at the United Nations and the African Union. Without robust commitments from public financial institutions, Africa will continue to face the dual crises of climate vulnerability and debt.

African countries must use COP29 to tackle systemic biases that inflate risk perceptions, minimise African achievements and inflate its problems. These biases drive up borrowing costs, and worsen commodity dependence.

THE CLIMATE FINANCE GAP

The African Development Bank has estimated that Africa needs between US$1.3 trillion and US$1.6 trillion in total climate financing every year between 2020 and 2030. This will enable African countries to meet their commitments to reduce greenhouse gas emissions, known as nationally determined contributions.

The Global Center for Adaptation estimates that Africa requires at least US$52.7 billion annually for adaptation every year until 2035. However, this figure could rise to US$106 billion. This is because data gaps allow for double counting of financial contributions. There is also very little transparency about the real amounts of climate finance being disbursed. Because nationally determined contributions are focused on mitigation, carbon depletion tends to be measured without accurate calculations of the amount of emissions that are captured, or carbon that is conserved.

The United Nations Development Programme says that Africa’s nationally determined contributions mean the continent needs about US$2.8 trillion by 2030 for climate mitigation. However, Africa contributes only 4% of all greenhouse gas emissions currently. It needs funds for adaptation to adjust to climate change that is already changing the lives of many, rather than for mitigation.

But only about half of the climate finance received by Africa in 2022 was for adaptation (US$4.6 billion). The rest of the climate finance addressed mitigation or a mix of both, in line with the global north’s agenda.

Worse still, 64.5% of adaptation financing came from loans, which need to be repaid. This will increase the financial strain on African nations.

LOANS VERSUS GRANTS FOR CLIMATE CHANGE ADAPTION

Multilateral financial institutions such as the International Monetary Fund (IMF) and the World Bank, and the Organisation for Economic Co-operation and Development through their Development Assistance Committee, handed out US$8.33 billion to Africa in 2022 for climate action. But most of this – US$5.4 billion – was loans. Only US$2.9 billion was grants, with a small fraction in equity investments.

These loans come with lower-than-market rates or extended repayment terms. But they still add to Africa’s external debt, which reached US$1.12 trillion in 2022. African countries’ debt repayments are twice what they get as climate finance.

The United Nations Framework Convention on Climate Change says developed countries are responsible for financing climate adaptation in vulnerable regions. But loans that create a huge debt burden only enrich global financial institutions at the expense of African countries.

The effects of climate change are causing unprecedented floods, drought and other disasters across Africa. Yet it is becoming more difficult for African countries to access the climate finance they need to adapt to a warming world.

Why is the situation worsening?

First, access to climate finance remains a bureaucratic nightmare with complex application processes. There also needs to be more transparency in fund allocation. The recently established Loss and Damage Fund could assist. It is meant to channel money to countries worst affected by climate change to pay for the damage caused.

Second, the focus on reforming Bretton Woods institutions and development finance institutions is shifting attention away from the obligations developed countries have signed up for. This distracts developing nations from making reforms in trade, taxation and financial regulations that could drive more meaningful results.

Third, there is a lack of liquidity (access to fresh money) needed to propel investment or allow countries to bridge their budget deficits. African countries are forced to juggle paying for healthcare, education and infrastructure development with paying back debt. Some spend more on debt repayments than healthcare.

Increased tax efficiency and domestic savings, such as the savings maintained by pension funds, could be used. This should be the priority while the fight for better international conditions continues.

Fourth, the distinction between development finance and climate finance is becoming an impediment to progress. The conversation should move away from getting African countries to prioritise greenhouse gas emission reductions at the expense of other development priorities. Climate action is under-implemented and underfunded. The focus must be on excessive dependency on aid and rather promote market incentives to encourage the private sector to invest in climate adaptation in Africa.