23 C
Kenya
Saturday, July 4, 2020

Kenyatta, Ndegwa families form third biggest bank in Kenya

Must Read

Andrew Kibe: This is why I quit Kiss FM

Controversial radio presenter Andrew Kibe on Tuesday morning announced that he had quit Kiss Fm. The presenter was the...

Why Kenya abandoned this KQ plane in Ethiopia

KQ Plane Abandoned in Ethiopia: For the past 31 years, KQ plane Boeing 707-315B has been collecting rust at...

List of multi-billion estates in Lang’ata, Racecourse set for demolition

Langata Estates: A number of multi billion estates in Lang'ata may be demolished if the ministry of environment gets...

The Kenyatta and Ndegwa families are set to form the third largest bank in Kenya. The bank, which will be the result of a merger between NIC Bank and Commercial Bank of Africa (CBA), will be bigger than the Co-operative Bank by assets.

It will now be ranked third after KCB and Equity Bank. Currently, KCB leads the banking pack by assets and profitability, with Equity Bank and Co-op Bank coming a close second and third. Their formation will follow a merger between the two banks. Currently, merger talks are in progress, with the banks stating that the merger process will be concluded soon. According to a statement sent to Bizna Kenya, the two lenders are currently working towards the successful conclusion of discussions on the merger and obtaining relevant approvals from shareholders of the two entities and regulatory authorities.

“The boards believe that combining the business of two highly profitable entities would create enhanced capacity through capital consolidation and strong liquidity to capture strategic growth opportunities,” the lenders say in a joint statement.

CBA is currently the seventh biggest bank in the country controlling a 6.05 per cent market share, according to the latest banking sector supervisory report. NIC on its part controls 4.62 per cent.

Combined, the two will have a market share of 10.67 per cent, which places the planned new entity above Cooperative Bank (9.93 per cent) and Below KCB Bank (14.14 per cent). “A combined entity would create a complementary base of over 38 million customers, a strong digital proposition and a robust corporate and asset finance offering,” the joint statement stated.

The Kenyatta and Ndegwa families have controlling stakes in these banks and their merger is expected to mark another milestone for two of Kenya’s leading political families.

“It is the view of the two boards that the potential merger would bring together the best in class retail and corporate banks with strong potential for growth in all aspects of banking and wealth management,” they lenders said in the statement. “A combined entity would create a complementary base of over 38 million customers, a strong digital proposition and a robust corporate and asset finance offering.”

The two lenders further say that a successful merger would allow them to “invest in future growth and in new technology to create enhanced offerings and wider services to its customers, as well as deliver deeper financial inclusion while generating attractive returns to shareholders. A combined larger group would provide new and greater opportunities for employee development, advancement and growth,” they said in the statement. “The combined group would be strongly placed to play a bigger and more significant role in the banking sector and the economies of Kenya, the region and beyond.”

Expectedly, NIC Bank has also issued a cautionary trading statement following the announcement. “This transaction, if successfully concluded, may have a material effect on the price of the company’s securities. Accordingly, shareholders, bondholders and the investing public are advised to exercise caution when dealing in the company’s securities,” said NIC.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

172,643FansLike
11,005FollowersFollow
137FollowersFollow
261SubscribersSubscribe
WhatsApp
Telegram

Latest News

Consumers Facing Financial Uncertainty Under Covid-19, New Report Shows

Consumers shrinking wallets have sparked drastic shifts in spending, purchasing habits, and routines as they try to cope with...

Chinese companies tap into African markets through global trade week

Global Trade Week: With more than 20 years of global experience in the exhibition industry MIE Events has pioneered the channel for Chinese companies...

Kenyatta family ordered to pay plumber Sh. 1.6 million

Kenyatta Family Brookside: The Kenyatta Family will now have to pay 80-year-old plumber David Gicheru nearly Sh. 1.6 million for unlawful sacking. Mr. Gicheru...

Andrew Kibe: This is why I quit Kiss FM

Controversial radio presenter Andrew Kibe on Tuesday morning announced that he had quit Kiss Fm. The presenter was the co-host of the morning show...

KRA couple made Sh. 615 million, evaded Sh. 38.6 million taxes

KRA Manager Salary: A Kenya Revenue Authority manager and his wife have been charged in court for evading taxes worth Sh. 38.6 million. The...

More Articles Like This

- Advertisement -