Editorials
EDITORIAL: Heed CBK advisory
Wednesday, June 5, 2019 20:24
By EDITORIAL
The Central Bank of Kenya (CBK) has warned of imminent collapse of the National Bank of Kenya (NBK) should the planned takeover by the KCB Group fail.
Being the banking sector regulator, CBK is a competent authority to make such a claim.
We can only assume that the sweeping statement was guided by facts since the CBK not only has access to inside information but also has technical capacity to evaluate a bank’s financial health. As such, MPs must heed its warning.
With a customer base of 650,000 and thousands others as shareholders, and business deals touching nearly all the segments of our society, the National Bank is obviously too big to fail.
Yet its books don’t look good. Core-capital position has plunged from Sh10 billion in 2016 to just Sh2 billion as at March this year over what the CBK attributes to mismanagement, political interference and a poor business model.
NBK will require an injection of at least Sh13 billion to stay afloat and to be in compliance with statutory requirements. As things stand, cash and expertise can only come from the planned KCB Group takeover. Parliament should not become a stumbling block.
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