This archive report was first published on 1 October 2019.
On October 1, 2019, the Commercial Bank of Africa and NIC Bank began operating as one entity, NCBA Group PLC, following approval by the Central Bank of Kenya (CBK) and National Treasury published in the Kenya Gazette on September 27, 2019.
The merger, which took effect on September 30, 2019, brings together two institutions with a combined market share of 9.9% and a customer base of over 40 million in four East African countries.
According to the CBK, the merger will strengthen both institutions, leveraging on their combined market share and customer base.
As of September 2018, CBA had approximately 21.5 million deposit accounts, while NIC had 116,000 accounts during the same period.
The two banks started discussions of a possible merger in December 2018, with the 34 owners of CBA set to own 53% of the merged company, while existing NIC Group shareholders will own 47%.
Global Credit Ratings (GCR) has cautioned that despite long-term benefits expected from the merger, operational and technical risks of combining two banking systems, funding structures, and cultures may slow earnings for several years.
Analysts predict that the banking sector is set to witness similar transactions as more banks consolidate.
