The Central Bank of Kenya and the National Treasury have granted approval for the merger of NIC Group PLC and Commercial Bank of Africa Limited (CBA), paving way for the creation of Kenya’s 3rd largest bank by assets.
The new merged Group will be called NCBA Group PLC and the Kenya operating bank will be known as NCBA Bank Kenya PLC.
The approval was published in the Kenya Gazette of Friday, 27th September 2019 and the union took effect on Monday, 30th September 2019.
“This name is the coming together of NIC and CBA and is just the beginning of the fusion of the two banks. Soon we shall be announcing the brand which is a reflection of both banks’ values, borrowing from the best of both and building new strengths to deliver better banking experience for our customers and set new standards for the industry. We are now on the last leg of becoming one group, NCBA Group,” remarked Isaac Awuondo, CBA’s Group Managing Director and Chairman designate of NCBA Bank Kenya PLC.
The proposed merger was first announced by the respective Boards of NIC and CBA on 6th December 2018 and in April 2019, shareholders of both banks approved the merger.
John Gachora, NIC Group’s Managing Director and NCBA Group Managing Director designate said, “We have made considerable progress towards readiness for day 1. Our plan is to spend the next one-month finalising the harmonisation of our systems so that all our customers can enjoy seamless services across our channels in Kenya. Our ambition is that by 1st November, all NCBA customers will experience the same service levels regardless of their previous relationship at NIC or CBA,” he said.
He added that the next phase of the merger is the integration of the businesses in Tanzania, Uganda and Rwanda, which is still subject to specific regulatory approvals from those countries.
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An enquiry by CEO East Africa magazine, to Bank of Uganda regarding whether and or when the merger will be given the greenlight was unanswered by press time.
But should it receive regulatory approval from BoU, the merger in Uganda will see NC Bank and CBA, previously the 17th and 22nd largest banks by assets, create a combined UGX474 billion asset base (2018 results), thus occupying the 14th largest bank by assets, just between Eco Bank (UGX390.8bn) and KCB Bank (UGX743 billion)- as per 2018 results.
The new entity would also be the 14th largest bank by lending and 15th by customer deposits.
Since both banks entered Uganda, they have had mixed profit books.
CBA which made a loss of UGX1.3 billion in 2017, turned profitable- making a humble UGX600 million profit in 2018. NC Bank on the other hand which was profitable in 2017, making a profit of UGX600 million, in 2018, made a UGX4 billion loss.
