None of the 1,872 employees of Commercial Bank of Africa and NIC Bank should be declared redundant for a period of 12 months from the date of closing of the transaction.
This is among agreements reached to approve the merger that has been approved by Competition Authority, that will see the new lender rank third in the country.
The parties also agreed that no branches will be closed unless in locations where the two former entities each have a presence.
Where overlaps exist, the merging parties indicated that they intend to open new branches in other locations.
CBA whose market share is at 6.05 per cent, and NIC Bank with 4.62 per cent will both hold 10.67 per cent of the market share post-merger.
“However, it is anticipated that the merged entity will continue facing competition from tier one banks who, together, control 55.32% of the market,” the regulator noted in their notice.
The lender will now be ranked third after Kenya Commercial Bank with assets of Sh684.1 billion at the end of 2017 and Equity Bank with Sh560.3 billion in assets respectively in the same period.
The banking sector has seen some six mergers and acquisitions over the past three years as industry players seek to build scale that is critical in lowering costs and boosting earnings.
KCB is in the final stages of completing the buyout of Imperial Bank, with its offer to take over five branches of the troubled lender. This will in effect enable Imperial bank customers recover 19.7 per cent of the remaining deposit balances still held by the collapsed bank.
KCB is also negotiating a 100 per cent buy of listed lender National Bank, in a share swap deal of one KCB share for every 10 of National,
Other completed mergers and acquisitions include DTB takeover of Habib Bank in 2017 in a share swap deal and last year’s acquisition of Chase Bank by State Bank of Mauritius (SBM).
Banking group I&M Holdings also completed its buyout of Giro Commercial Bank in 2017 in a cash-and-stock deal.
