KCB Group, the biggest lender in Kenya by assets, has secured the central bank’s approval to acquire National Bank of Kenya (NBK).

The Central Bank of Kenya (CBK) approved the transaction as per Section 13(1) (e) of the Banking Act.

In the statement, CBK said: “The acquisition will strengthen both institutions leveraging on their respective well-established domestic and regional corporate, public sector and retail franchises.”

The decision comes just a month after a Kenyan parliamentary committee recommended that the government should reject the deal, reported Reuters. Instead, the committee suggested raising capital by selling additional shares to support the struggling lender.

In April this year, KCB made an offer to acquire 100% shares of domestic peer NBK.

The acquisition was planned to be carried out through a share-swap process where ten shares of NBK will be exchanged for one KCB share.

Subsequently, the move received the green light from the shareholders.

Incorporated in 1968 as a wholly-owned government entity, NBK provides financial services to individuals, SMEs and large corporations.

Over time, the government has reduced its shareholding in the lender. However, CBK and the Treasury, along with the state pension fund, hold more than 70% stake in NBK.

Headquartered in Nairobi, KCB Group is a financial services holding company that oversees banking operations in Kenya.

The company also operates its subsidiaries in Uganda, Tanzania, Rwanda, Burundi and South Sudan. KCB Group also has a representative office in Ethiopia.