NIC and CBA Merger: The NIC Bank  Group and Commercial Bank of Africa (CNA) have have started merger talks. 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,” they said in a joint statement.

The merger is expected to be a major boost for the NSE listed NIC Bank. Currently, Commercial Bank of Africa (CBA) is majority-owned by the Kenyatta family.

“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 said 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.”

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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.

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