This archive report was first published on 27 September 2019.
On September 27, 2019, the Central Bank of Kenya (CBK) approved the merger of Commercial Bank of Africa and NIC Group, paving the way for the creation of a new entity.
The merged entity, NCBA Group PLC, will operate under a non-operating holding company, with the banking business in Kenya operating as NCBA Bank Kenya PLC.
According to CBK, all account holders, depositors, employees, creditors, and other stakeholders of the existing institutions should deal with NCBA Bank Kenya PLC and NCBA Group PLC.
The merger is expected to strengthen both institutions, leveraging their combined market share of 9.9% and customer base of over 40 million in four East African countries.
Competition Authority of Kenya Director-General Wang'ombe Kariuki noted that the merged entity will have a market share of 10.67%, making it the second-largest bank in the country.
However, Kariuki also pointed out that the merged entity will continue to face competition from Tier 1 banks, who together control 55.32% of the market.
As of December 2017, KCB controlled 14.14% of the market share, followed by Co-operative Bank of Kenya (9.93%) and Equity Bank (9.85%).
Standard Chartered Bank has 7.11% market share, while Diamond Trust Bank has 6.72% and Barclays Bank of Kenya 6.57%.
However, the banking sector is also diversified regionally, with KCB at the pole position with Sh714 billion in total assets as of December last year, followed by Equity Bank with Sh605 billion as of March this year.
Commercial Bank of Africa has been operational for over 50 years and is wholly owned by a group of institutional and individual investors with extensive business interests in Kenya and East Africa.
It has invested in both banking and non-banking subsidiaries in Kenya, Rwanda, Tanzania, and Uganda.
NIC was established in 1959 as an asset finance company and obtained a commercial banking license from CBK in 1995.
It merged with African Mercantile Bank Limited in 1997 and has a presence in Kenya, Tanzania, and Uganda.
