In a joint statement sent to newsrooms today, NIC Bank and Commercial Bank of Africa (CBA) have announced that they are holding talks for a merger. The two banks today indicated that they were eyeing “successful conclusion” of discussions on the merger and obtaining relevant approvals from shareholders of the two entities and regulatory authorities.
“It is the view of the two boards that a potential merger would bring the best of the two entities in class retail and corporate banks,” reads the statement signed by NIC Chairman James Ndegwa and his CBA counterpart Destario Oyatsi.
The two lenders said a successful merger would allow it to “invest in future growth and in new technology to create enhanced offerings and wider services to its customers, as well as deliver deeper financial inclusion while generating attractive returns to shareholders.”
In January 2015, the first tell-tale signs of a potential marriage between the tier two financial institutions emerged but they however denied the claims terming them as rumours.
Commercial Bank of Africa (CBA) is majority-owned by the Kenyatta family while the Nairobi Securities Exchange- listed NIC Group is partly owned by the billionaire businessman James Ndegwa’s family.
If successful, the planned merger of the midsized NIC Bank and the tier one CBA Bank would create one of the largest financial services groups in the region
“It is important to note that an eventual merger is subject to due diligence process, shareholders, regulatory and other approvals,” the statement added.
Listed at the Nairobi Securities Exchange, NIC has issued a cautionary statement as required by the regulator in respect to trading of its shares.
If successfully concluded, the transaction may have a material effect on the price of the company’s securities,” it noted. NIC’s stock stood at Ksh. 22.65 per share by close of Thursday, 0.67 per cent, up from the previous day’s Ksh. 22.50 per share.