The Central Bank of Kenya and the National Treasury have given a given the go-ahead for the NIC Group Plc and Commercial Bank of Africa merger making the joined entity Kenya’s third-largest lender by asset base.
Yesterday, the approval was published in the Kenya Gazette, showing that the merger will take effect on Monday September 30.
The two banks first announced the deal in January, in which current NIC Group shareholders would own 47 per cent of the merged entity and CBA shareholders 53 per cent.
In March, Commercial Bank of Africa said its shareholders had accepted a share swap with NIC Group, whose shareholders finally agreed to the amalgamation on April 17.
The merged entity will be called NCBA group Plc and the Kenya operating bank will be known as NCBA Bank Kenya Plc.
“Following the merger, effective October 1, 2019, all subsidiaries will operate under a non-operating holding company, NCBA Group Plc,” the central bank said in a statement.
The central bank said the merged entity will have a combined market share of 9.9 per cent and a customer base of over 40 million people in East Africa.
The merged group will also have more than 100 branches, spanning Kenya, Tanzania, Uganda, Rwanda and Ivory Coast.
“Soon we shall be announcing the brand which is a reflection of both banks’ values, borrowing from the best of both and building new strengths to deliver better banking experience for our customers and set new standards for the industry,” CBA group managing director Isaac Awuondo said.
Awuondo, the chairman designate of NCBA Bank lauded regulators for granting necessary approvals in a timely manner and for guidance received during the merger process.
NIC is a leading bank in asset financing and has a strong base of mid-sized corporate clients. CBA has a strong retail client base, including digital-only customers on its M-Shwari mobile platform.
NIC’s group managing director and NCBA Group MD designate said they plan on spending one month on finalising and harmonising the merged entity’s systems to ease customer service.
“Our ambition is that by 1st November, all NCBA customers will experience the same service levels regardless of their previous relationship at NIC or CBA,” he said.
The merger is the second major one in the sector since the government imposed a cap on commercial interest rates in 2016.
Earlier this month, the central bank also approved KCB Group, the region’s biggest bank by assets, taking over the National Bank of Kenya.
After the merger, the banks said they would also have a presence on mobile platforms in Tanzania, Uganda, Rwanda and Ivory Coast, in collaboration with telecoms firms in the four countries.
