National Bank pitches for customer deposits as shareholder recapitalization delays

National Bank wants to get much-needed liquidity from customers and institutions that bank with it as its capital raising from owners drags on.

NBK announced a funds drive promising to pay interest rates above the minimum for all savings by customers in a bid to boost its customers’ deposit base.

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Managing Director and Chief Executive Officer Wilfred Musau said the state-owned lender has chosen to provide full benefits to our existing and new Savings Account customers by giving them up to 7% in interest on all Savings as we celebrate our 50th birthday.

The tiered rate will see savers earn 1 percent for deposits between Sh 5,001 and Sh 50,000, 5 percent for savings between Sh 50, 001 and Sh 2, 000, 000, and 7 percent for  Sh 2, 000, 001 and above.

National Bank has been having liquidity constraints following the delayed capital raising between the National Treasury and the National Social Security Fund (NSSF) who have in principle committed to pumping in Sh4.2 billion.

NBK’s core capital – equity capital plus reserves as a ratio of deposits – was at 1.8 percent against CBK recommendation of eight percent.

Related: KCB retains ratings on stable buffers against new rules

The bank has reduced loans to customers by 17 percent from Sh 57 billion last year to Sh 47 billion this year and lost Sh2.7 billion worth of deposits.

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