Access Bank hot on NBK deal

Nigeria's Access Bank is in the final stages of wrapping up its acquisition of National Bank of Kenya (NBK) from KCB Group, Kenya’s largest bank, five months after the deal was expected to close. 

The move is a big step in Access Bank’s push to expand across Africa and could give it a stronger presence in Kenya, East Africa’s largest economy.

KCB Group CEO Paul Russo confirmed on Wednesday that the deal is still on track, noting that NBK’s performance has already been included in KCB’s 2024 full-year results. Russo said they’re in the advanced stages of getting regulatory approvals.

In October 2024, Kenya’s Competition Authority (CAK) gave the green light for the deal, with the condition that Access Bank keeps at least 80% of NBK’s 1,384 employees for a year after the acquisition. 

Access Bank was also required to retain all 316 employees of its Kenyan subsidiary. This approval moved the deal closer to completion.

According to Lawrence Kimathi, KCB Group’s CFO, the timeline for the deal was extended to February this year because they were waiting on regulatory approvals. Kimathi added that the Central Bank of Nigeria (CBN) has already given its nod, and now they’re just waiting for the final approval from the Central Bank of Kenya (CBK). 

The pending sale has already impacted KCB’s 2024 financial results. The bank reported a KES 2.0 trillion ($15.4 billion) balance sheet, the largest in the region. However, total assets dropped by 10%, partly due to the Kenyan shilling’s appreciation against other regional currencies. 

Although the exact value of the deal hasn’t been disclosed, KCB previously agreed to sell NBK at 1.25 times its book value. Based on NBK’s 2023 book value of $79.77 million, the deal could be worth around $100 million.

The Central Bank of Kenya (CBK) announced on Wednesday that it will replace branch-based banking licence fees with a Gross Annual Revenue (GAR) system. Under the new model, banks will pay a percentage of their yearly income at progressive rates—starting at 0.6% in 2025 and rising to 1% by 2027—to maintain their licences. This marks the first change to the CBK’s licensing fee structure in 33 years.

The CBK is also removing other fees such as application and renewal fees which previously existed in its old system, and consolidating these charges into the GAR-based fee. 

The regulator is hoping to create a fairer system where larger, more profitable banks contribute more, while smaller banks pay less. The CBK expects the new model to generate KES 4.5 billion ($34.7 million) in the first year, increasing to KES 7.5 billion ($57.9 million) by 2027.

The GAR model ties banks' license fees to their income, meaning they’ll pay more as they earn more. This is expected to reduce their profits by 1.8% to 3.1% over the next three years. Since banks rely heavily on lending to make money, they’ll likely try to optimise this area to maximise profits. However, with Kenya’s high rate of bad loans, banks may face challenges in lowering lending rates as the CBK wants. To protect their profits, banks might resist fully complying with the regulator’s push for lower rates, creating tension as banks try to increase earnings against making credit more affordable.

While the CBK’s move is well-intended for Kenya’s banking sector, the expectations weighing on banks may be too high—it becomes a question of how much they can take. One theory is that banks would likely pass on the costs to customers.

South African startups are rising to the occasion. 

Electricity prices in South Africa are set to rise by 26% over the next three years, starting with a 12.7% increase this April, along with upcoming value added tax (VAT) increase, and revisions to municipal electricity prices. 

While the country’s energy supplier, Eskom, says its price adjustments aim to cover production costs and encourage renewable energy adoption, these increases are pushing energy costs higher for households and businesses.

In response, the country’s growing energy startup ecosystem is rising up to the occasion to provide innovative solutions such as smart energy management tools, off-grid systems to renewable energy services. These startups are both helping South Africans reduce electricity bills and also pave the way for a more sustainable and affordable energy future. 

Companies like Sensor Networks, founded in 2007, offer smart home energy management tools like geyser sensors to reduce energy costs by up to 40%. Partnering with Ariston, Sensor Networks aims to scale its impact amid growing demand for energy-efficient appliances. Similarly, Versofy provides "Solar as a Service" to make solar installations accessible through subscription-based models, enabling customers to save up to 70% on electricity. Switch Energy focuses on energy trading, smart metering, and fair billing systems, particularly in low-income areas. Their technology improves energy use and supports localised renewable projects. 

While startups face challenges such as high capital requirements and regulatory hurdles, the potential for scalable solutions and greater private sector participation in the energy market is huge. 

Looking ahead, trends like "time of use" prices may increase demand for load-shifting technologies. With over 300 energy startups launched since 2016, this ecosystem is crucial in addressing rising costs and promoting a mixed, sustainable energy market, less reliant on coal and Eskom.

If you've been experiencing terrible network connectivity this week, this news might make your day. Nigeria's two biggest telecom operators, MTN Nigeria and Airtel, have committed to increasing investments in their network infrastructure to improve broadband connectivity across the country.

MTN Nigeria spent ₦225.85 billion ($147.2 million) on core network investment in Q4 2024—half of its total investment in the year. Airtel Africa plans to spend $750 million in the 12 months ending March 2025. 

The recent 50% increase in telecom tariffs, approved by the Nigerian Communications Commission (NCC), has also played a role in this new wave of spending. With the increase, telecom operators expect to see higher revenues from data and voice tariffs, which will give them spending leeway to expand their coverage, improve service quality, and meet the growing demands of customers.

MTN and Airtel will also increase core telecom network investment in the coming months, citing strong data usage among Nigerians. Both telecom operators reported strong growth in data revenue in 2024. While data revenue for MTN Nigeria grew by 41.9% (₦1.6 trillion ~ $1 billion), Airtel reported a 36.2% decline ($344 million) in the nine-month period ending December 2024. Despite the decline, data usage per customer increased.

Core network investments are crucial for Nigeria’s digital economy, as more Nigerians depend on telecom operators—evident by their large subscriber bases—for internet access compared to internet service providers (ISPs). The surge in data demand, driven by streaming, social media, and digital services, has pushed average data usage per subscriber to 11.2GB for MTN and 8.4GB for Airtel as of Q4 2024.

With telcos now committing to increased investment in core infrastructure, there is hope for improved network quality, faster internet speeds, and better coverage across Nigeria.