CBA to acquire 53% stake in merger with NIC Bank
- NIC current shareholders will maintain control to the remainder of the 47 percent stake in the newly integrated entity.
- NIC and CBA will pull a combined weight of 85 branches, 26.1 customers and 1872 staff in Kenya to become the third largest bank in the country after KCB and Equity.
NIC bank has announced plans to handover up to 53 percent of its stake to the Commercial Bank of Africa (CBA) shareholders, setting the expected merge- ship on sail.
The two on Thursday jointly acknowledged ongoing negotiations to be conducted through a share swap where the NIC current shareholders will maintain control to the remainder of the 47 percent stake in the newly integrated entity.
The merger is expected to raise a new outfit at the start of the third quarter in July upon the receipt of shareholder and regulatory approval.
Speaking during the joint update, CBA Managing Director Isaac Awuondo said the deal will increase the banks’ lending ability elevating their joint position to become a major player in the regional banking scene.
“We can see the opportunities, so do our shareholders. They see an evolving financial services industry and the opportunities created from scaling up our business,” he said.
“This is a marriage. People who get together have the most in common. We have the most in common (with CBA), culturally, strategy-wise, governance and integrity, so, why not?” NIC Managing Director John Gachora added.
The deal also carries some good news to the lenders’ staff as the two banks eye a workforce expansion to consolidate on the scale of the merged entity. This to go against the trend of employee-shakedowns associated with mergers.
“We do not have the kind of reach we would like to have as a Kenyan banking champion. The expectation is that, with growth in network, what you should see is growth in numbers,” Mr Awuondo said.
At the end of the transaction, NIC and CBA will pull a combined weight of 85 branches, 26.1 customers and 1872 staff in Kenya to become the third largest bank in the country after KCB and Equity by asset value and customer base.
For the two, the strategy post-merger is to keep the new entity on a positive growth trajectory to become a power player in Kenya’s banking scene by combining their expertise in asset financing and mobile banking respectively.
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