KENYA – The Central Bank of Kenya and the National Treasury have granted approval for the merger of NIC Group PLC (NIC) and Commercial Bank of Africa Limited (CBA). The amalgamation takes effect on, 30th September 2019.
The new merged Group will be called NCBA Group PLC and the Kenya operating bank will be known as NCBA Bank Kenya PLC.
Isaac Awuondo, CBA’s Group Managing Director and Chairman designate of NCBA Bank Kenya PLC thanked all the regulators for granting the necessary approvals expeditiously and for the guidance received during the merger process.
“This name is the coming together of NIC and CBA and is just the beginning of the fusion of the two banks. 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. We are now on the last leg of becoming one group, NCBA Group.”
The proposed merger was first announced by the respective Boards of NIC and CBA on 6th December2018. In April 2019, shareholders of both banks approved the merger.
John Gachora, NIC Group’s Managing Director and NCBA Group Managing Director designate said, “We have made considerable progress towards readiness for day 1. Our plan is to spend the next one-month finalising the harmonisation of our systems so that all our customers can enjoy seamless services across our channels in Kenya. 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.”
The merger is expected to strengthen both institutions leveraging on their combined market share of 9.9 percent and customer base of over 40 million in four East African countries
On Asset base, the combined bank will be amongst the largest financial institution in the East African region with an asset base of KSh444 billion (US$4.4bn) about 100 branches and shareholders’ equity of KSh65 billion (US0.6bn).
The merger will be executed through a share exchange, with a share ratio between NIC and CBA being 47:53 respectively.
CBA has been operational for over 50 years and is wholly owned by a group of institutional and individual investors with extensive business interests in Kenya and East Africa.
It has invested in both banking and non-banking subsidiaries in Kenya, Rwanda, Tanzania and Uganda.
As at June 30, 2019, CBA had a market share of 5.6 percent. NIC was established in 1959 as an asset finance company and obtained a commercial banking license from CBK in 1995.
It merged with African Mercantile Bank Limited in 1997. It has a presence in Kenya, Tanzania and Uganda. As at June 30, 2019, NIC had a market share of 4.3 percent