Kenyan Bank Set to Become Biggest African lender by Customer Numbers.

Nairobi, Jan 31- A merger between two Kenyans banks, expected to be complete in the second half of 2019 will create Africa’s biggest bank by customer numbers.

The expected merger between Commercial Bank of Africa (CBA) associated with President Uhuru Kenyatta’s family and NIC Bank, a mid-two tier bank, affiliated a Kenyan billionaire family with interests in shipping, real estate and farming, will create a behemoth serving  over 40million customers, with the combined entity becoming the largest bank in Africa by customer numbers.

“The proposed merger will create a bank with the financial strength, expertise and regional reach to support Kenya’s and the region’s economic growth aspirations. In particular , the merged entity will be in a strong position to play a key role in supporting Kenya’s economic ambitions, specifically facilitating  implementation of the Big Four Agenda which focuses on food security , affordable housing, manufacturing and universal health care,” said John Gachora, NIC Group Managing Director.

In a press release, the two institutions said the merger plans are expected to be over by the second half of 2019.

The combined bank will be amongst the largest financial Institutions in the East African region with a total asset base in excess of Ksh 444 Billion (US $ 4,398,652,633) and shareholders’ equity of Ksh 65 billion (U.S$643,946,894.50).

It will be the second biggest lender in Kenya by customer deposits and the third largest by total assets. The bank will operate a network   of more than 100 branches across five regional economic centers including Nairobi, Kampala, Dar es Salaam, Kigali and Abidjan.

The merged entity will be a clear market leader in Asset Finance and Corporate Banking within the East Africa market.

Desterio A. Oyatsi Chairman of CBA had this to say:

“This merger presents us with the opportunity to play a critical role in the economies of the markets we operate in and the foundation to scale our business into too the markets within our continent; leveraging our core strengths of innovation which have delivered considerably too our financial inclusion agenda and enabled us to provide access to financial services to over 40 million customers in 5 markets. We are well positioned to use our strong focus in relationship management, customer service and digital deliveries to change the face of banking in our markets .These are exciting times indeed, for our staff, our customers and shareholders.”  

The proposed merger will be executed through a share swap and it’s proposed that the 34 shareholders of CBA will exchange their shares in CBA for new shares in NIC, which will be the holding company of the merged business and remain publicly listed company quoted at the Nairobi Securities Exchange (NSE).

It is envisioned that the share exchange ratio will be based on a 47: 53 relative valuation of NIC and CBA respectively.

As such, it is expected that the CBA shareholders will in aggregate own 53 % of the issued shares in NIC, while existing NIC shareholders will own 47% of the issued shares in NIC.