Fitch Ratings on June 3 placed KCB Group PLC's B+ long-term issuer default rating on Rating Watch Negative.
Also placed on Rating Watch Negative were the Kenyan lender's AA(ken)/F1+(ken) national long- and short-term ratings and "b+" viability rating. The group's B short-term issuer default rating, 5 support rating and No Floor support rating floor were affirmed.
The rating agency also placed KCB Group unit KCB Bank Kenya Ltd.'s "b+" viability rating on Rating Watch Negative and affirmed its B+/B long- and short-term issuer default ratings, AA(ken)/F1+(ken) national long- and short-term ratings, 4 support rating and B+ support rating floor. The outlook on the long-term ratings is stable.
The ratings action follows KCB's proposed acquisition of National Bank of Kenya Ltd. by the end of 2019, following regulatory and other necessary approvals.
The placement on Rating Watch Negative of the viability ratings of KCB Group and KCB Bank reflects Fitch's expectation that the deal will lead to weaker asset quality and capitalization metrics for the combined bank. Fitch expects to resolve the Rating Watch Negative after the transaction is completed and information on the group's consolidated profile post-acquisition becomes known.