NCBA Group plans to pump another Sh2 billion into the local subsidiary of the American International Group (AIG Insurance Kenya) in an effort to tap the company’s high-profile clients.
The lender said its board had given the green light to the proposed transaction, which if successful, will see it take control of the insurer.
AIG Kenya serves customers across the East Africa region. NCBA serves customers across four countries in East Africa – Kenya, Uganda, Tanzania, and Rwanda.
Last year, the lender’s investment in AIG Kenya hit Sh1.03 billion from Sh987.3 million a year earlier. This time, the additional cash (Sh2bn) will be enough for the lender, a minority shareholder in the insurance firm at 33.3% to buy the remaining 66.7% stake to take full charge of the diversified financial firm.
“We believe that by bringing together NCBA’s physical and digital distribution platforms and AIG Kenya’s insurance capabilities we will accelerate towards our ambition to become a universal bank that addresses a full set of our customers’ financial needs,” NCBA Group MD John Gachora said.
He added that insurance is increasingly becoming a basic financial need for the type of customer that NCBA serves, and that as a regional banking Group, the lender is poised to take advantage of AIG Kenya’s breadth and scale to further entrench itself in the markets in which it operates.
Stella Njunge, CEO of AIG Kenya said the planned buyout represents an opportunity to continue to build on AIG Kenya’s solid platform.
“Through a combination of NCBA’s customer-centric product offering and their cutting-edge technology solutions, customers will be able to access a variety of insurance products and services, seamlessly,’’ she said.