Plans to merge two Kenyan banks will create a lender that can compete adequately with West African banks that are expanding into the region, Treasury Cabinet Secretary Henry Rotich has said.
NIC Group, one of Kenya’s mid-sized publicly traded banks, is in merger talks with Commercial Bank of Africa (CBA), the nation’s biggest closely held lender, the two said Thursday. The combined entity would rank among the country’s top three lenders.
Mr Rotich welcomed the move, saying the stronger bank would provide more credit in East Africa’s biggest economy and take on rivals from West Africa that have made forays into the region.
Guaranty Trust Bank, Nigeria’s largest lender by market value, and United Bank for Africa, its third-largest by revenue, have operations in East Africa.
Both NIC and CBA already operate in Uganda and Tanzania, and CBA has ambitions to operate in 16 African nations.
“One of the biggest constraints we have seen is that Kenyan banks have not been able to play a big role because of their size,” Rotich told reporters in Nairobi.
Kenya has about 43 commercial banks, more per person than South Africa and Nigeria, Africa’s two biggest economies.
Combining the NIC and CBA would create one of East Africa’s largest banks, with total assets of about Sh452 billion, data from their 2017 annual reports show.
That would be bigger than Co-operative Bank of Kenya, the third-largest lender. KCB Group, the region’s biggest bank, has total assets of Sh646.7 billion.