CBA in merger talks with rival NIC Bank
1 weeks ago, 00:13
The Commercial Bank of Africa (CBA) which is associated with the Kenyatta family has started talks that will see it merge with NIC Group in what promises to be the corporate buyout of the year.
In a joint statement late yesterday, the two lenders said that upon the successful conclusion of the discussions and approvals from shareholders of the two entities and regulatory authorities, the merger would create one of the largest financial services group in the region.
“It is the view of the two boards that the potential merger would bring together the best in class retail and corporate banks with strong potential for growth in all aspects of banking and wealth management,” the statement read in part.
This would push CBA to the second biggest bank in Kenya by market share after KCB, toppling Cooperative, Equity, Standard Chartered, Diamond Trust and Barclays.
CBA is currently the seventh biggest bank in the country controlling a 6.05 per cent market share, according to the latest banking sector supervisory report. NIC on its part controls 4.62 per cent. Combined, the two will have a market share of 10.67 per cent, which places the planned new entity above Cooperative Bank (9.93 per cent) and Below KCB Bank (14.14 per cent)
“A combined entity would create a complementary base of over 38 million customers, a strong digital proposition and a robust corporate and asset finance offering,” the joint statement stated.
NIC, which is associated with the Ndegwa family, has had a good run in the financial industry and has become a market leader in asset finance.
Though the deal is being marketed as a merger, it is understood that CBA, which has grown exponentially in the last decade to become a tier one bank will be the one with the last laugh and is understood to be the one buying NIC.
CBA’s breakthrough came with the deal with Safaricom to host the banking end of the M-Shwari, a mobile lending application that has seen it bag millions of new accounts.
The Central Bank of Kenya (CBK), which regulates the banking industry, has been blowing hot and cold over the issue of consolidation.
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