The NIC Group and the Commercial Bank of Africa (CBA) are locked in talks over a merger in a move that could see the two lenders have the necessary infrastructure at their disposal in a bid control a sizable portion of the Kenyan banking industry’s market share.
In a statement to newsrooms, the two banks stated that they are engaging regulatory bodies as talks continue, approval of such a merger would require the nod of The Central Bank of Kenya as well as The Competition Authority of Kenya (CAK).
“The boards believe that combining the business of two highly profitable entities would create enhanced capacity through capital consolidation and strong liquidity to capture strategic growth opportunities,” the two lenders said in the statement.
According to the lenders, if the deal goes through, they would have a combined 38 million customers which represents a fantastic proposition for them.
The Kenyatta Family owns controlling stake in CBA while NIC bank is partly owned by embarrassingly rich businessman James Ndegwa.
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Following the announcement of the merger talks, NIC which is a public listed firm issued a trading advisory to shareholders and potential investors telling them to exercise caution when investing in the company’s securities.
“This transaction, if successfully concluded, may have a material effect on the price of the company’s securities,” read the statement.
NIC’s stock stood at Ksh22.65 per share by close of business on Thursday up from Wednesday’s Sh 22.50 per share.
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NIC and CBA in the statement claimed that the merger will allow the two organisations 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.
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