Shareholders approve banks merger

[Photo: Courtesy]

Shareholders of NIC and Commercial Bank of Africa (CBA) have approved the planned merger of the two lenders, a transaction that will create the third-biggest bank in the region.

NIC yesterday said it had received approval from its shareholders at an annual general meeting, while CBA also got the go-ahead from its owners during a general meeting Tuesday.

In a statement, NIC Bank said the two entities are set to recruit consultants to develop a new brand identity for the new bank.

The merged bank will have an asset base of Sh444 billion, making it the region’s third largest after KCB and Equity. It will have more than 41 million customers.

“The approval allows NIC and CBA to merge their operations and amalgamate the shareholding through which the shareholders of CBA will become 53 per cent shareholders of NIC,” said NIC Chairman James Ndegwa.

“The endorsement paves the way for completion of the merger that will deliver significant benefits to the group stakeholders. It is expected that the process will be concluded in the third quarter of 2019.”

The transaction will take place through a share swap between the two banks, with current NIC group shareholders owning the balance of 47 per cent of the merged entity.

Regulators

The transaction is still subject to the approval of the relevant regulatory authorities including Central Bank of Kenya, Capital Markets Authority and Competition Authority.

Additional approvals will be required from the regulators in other countries where NIC and CBA operate.