How Commercial Bank of Africa snatched and run with the multi billion M-Akiba deal

KCB was beaten to the deal for attaching a fee of 0.5 percent for the guaranteeing offer while on the other hand CBA offered a lower rate of 0.3 percent and did not demand additional compensation, Treasury sources revealed.

CBA, Kenya’s largest privately owned bank won the price war against Kenya’s largest bank,  (KCB) and now stands to make a fortune and cement its position as the pioneer in technology driven ventures.

Geoffrey Odundo, the Chief Executive of the Nairobi Securities Exchange confirmed the deal.

“They (CBA) will be the buyer to every seller and a seller to every buyer,” he said.

The bell ringing ceremony for M-Akiba bond was held yesterday at the Nairobi Securities Exchange.

“We do not envisage this as a one-off. This has to be a permanent part of our financial services market architecture that offers the average Kenyan an opportunity to participate in the bonds market,” Mr Ndoho said at a bell ringing ceremony for the bond.

The second tranche of M-Akiba, worth $485 million is slated for June and will be opened by President Uhuru Kenyatta.

This is not the first time however CBA which is owned by the Kenyatta family has strategically position itself as the leader in technology driven ventures.

In November 2012, through a strategic partnership with Safaricom, it launched M-Shwari, a credit service which offers clients with soft loans through their handset.

Early this month, CBA made headlines again after it launched a new banking solution called, 'CBA Loop' targeting millenials.

After a bruising price war, KCB is said to have sought three percent compensation for the value of any bond it purchases, which is similar to what the central bank gets when it buys a bond from an investor as the buyer of last resort.

The Central Bank of Kenya buys bonds from investors that have either not matured or have failed to attract a buyer at the Nairobi bourse, but at a discount of three percent of the prevailing price.


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