KCB Group has made an offer to acquire 100% shares of domestic peer National Bank of Kenya (NBK).

The move comes at a time when a series of consolidations is underway across the Kenyan banking sector. Last week, another Kenyan lender NIC Bank secured shareholder approval for its merger with Commercial Bank of Africa (CBA).

KCB proposed the transaction through a share swap of ten ordinary shares of NBK against one ordinary share of KCB.

However, KCB did not disclose the valuation for NBK.

In the recent years, NBK is troubled with increasing bad debts. The deal, if advances, is expected to restore the bank’s market position.

The Kenyan government holds a 22.5% stake in the bank. The National Social Security Fund (NSSF) holds 48.06% and the remaining 29.44% is with public.

On the other hand, the National Bank of Kenya acquisition is aligned with the KCB’s expansion strategy. It will also help bolstering its presence in existing market.

KCB Group CEO and MD Joshua Oigara said: “The proposed transaction will further consolidate the banking sector in Kenya and will create stronger institutions enabling KCB to play a bigger role in the financial inclusion agenda.

“The acquisition would accelerate the Group’s growth ambitions and enhance value to all stakeholders.”

The acquisition offer is subject to respective shareholder and regulatory approvals.

Established in 1896, KCB Group is one of the largest commercial bank in East Africa with 258 branches.

Besides Kenya, the bank operates in Tanzania, South Sudan, Uganda, Rwanda, Burundi and Ethiopia (Rep).