This archive report was first published on 19 August 2019.
On August 19, 2019, the National Treasury made a significant move by exempting the merged CBA and NIC bank from paying share transfer tax.
The exemption was granted by suspended National Treasury Cabinet Secretary Henry Rotich, who had previously exempted the transfer of CBA shares into NIC Bank from paying stamp duty of one percent of the worth of the unquoted stocks being transferred.
According to reports, the transaction involves a share swap between the two banks, with current NIC group shareholders owning 47 percent of the merged entity and CBA shareholders, including the Kenyatta family, owning 53 percent of the merged entity.
NIC Group will remain listed, suggesting a transfer of the CBA unquoted shares, which makes them liable for the one percent stamp duty tax. Analysts estimate the value of the 53 percent stake at Sh. 35 billion, based on the book value of Sh. 65 billion when the deal was announced, putting the stamp duty charge at more than Sh. 350 million.
The combined franchise will boast of 26 million customers in Kenya and 42 million regional customers at group level, making it the largest bank in the region by customer base.
NIC Bank chief executive John Gachora will be the head of the new banking outfit, while CBA counterpart Isaac Awuondo will become chairman of the Kenyan banking subsidiary.
