Central Bank of Kenya (CBK) has approved the merger between NIC Group Plc (NIC) and Commercial Bank of Africa Ltd (CBA) effective September 30, 2019.

Following the merger, all subsidiaries will operate under a Non-Operating Holding Company, NCBA Group Plc while the merged institutions will operate as NCBA Bank Kenya Plc.

Approval of the deal by CBK paves the way for creation of the country’s third largest bank by assets.The assent was published in the Kenya Gazette dated September 27, 2019.

The regulator said all account holders, depositors, employees, creditors and other stakeholders of the existing institutions should now deal with NCBA Bank Kenya Plc and NCBA Group Plc.

“The merger will strengthen both institutions leveraging their combined market share of 9.9 per cent and customer base of over 40 million in four East African countries,” CBK said in a statement yesterday.

CBA’s Group Managing Director Isaac Awuondo, who is also chairman designate of NCBA Bank Kenya, said the coming together of NIC and CBA 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,” he added.

The proposed merger was first announced by the respective boards of NIC and CBA on December 6, 2018.  Shareholders of both banks approved the merger in April.

The next phase of the merger is the integration of the businesses in Tanzania, Uganda and Rwanda, which is still subject to specific regulatory approvals from those countries.

CBA has been in operation 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 per cent.

NIC was established in 1959 as an asset finance company and obtained a commercial banking licence from CBK in 1995. It merged with African Mercantile Bank Ltd in 1997. 

It has a presence in Kenya, Tanzania and Uganda. As at June 30, 2019, NIC had a market share of 4.3 per cent.