Parliamentary committee on finance and national planning has faulted the National Treasury’s reluctance to rescue National Bank even after being aware of the capitalization hiccups the bank faced.
The committee Chairman Joseph Limo said documents presented before them suggested the bank would not be facing capitalization challenges had the National Treasury acted faster.
“The problem of National Bank has always been capitalization which was largely dependent on the bank’s two main shareholders – the National Treasury and National Social Security Fund (NSSF). We have been informed that at some point, the bank required Kshs. 4.2 billion in additional capital which was to be contributed by the two shareholders. NSSF board approved Kshs. 2.9 billion to recapitalize the bank but the Treasury did not meet its side of the bargain,” Mr. Limo said.
The committee also questioned the mystery surrounding the 2013 rights issue request when the bank intended to raise Kshs. 13 billion in new capital.
“We hosted Capital Market Authority a few weeks ago who refuted the claim that it declined to give approval to the rights issue process. The government had the opportunity to either refinance the bank as had been agreed with NSSF or support the rights issue, and it did neither,” he said.
The committee was seeking clarifications on some of the key issues concerning the proposed takeover of National by KCB Group.