CS Henry Rotich welcomes NIC and Commercial Bank of Africa merger talks :: Kenya


A branch of Commercial Bank of Africa in Nairobi (PHOTO: FILE)

NAIROBI, KENYA: National Treasury Cabinet Secretary Henry Rotich said on Friday that he welcomed merger talks between NIC Bank and Commercial Bank of Africa as it would help strengthen the financial sector.

The two Kenyan commercial lenders announced on Thursday that they would hold talks on a potential merger which would be the first major deal since the government capped commercial lending rates in 2016.


NIC, Commercial Bank of Africa start merger talk

This would push CBA to the second biggest bank in Kenya by market share after KCB, toppling Cooperative, Equity, Standard Chartered, Diamond Trust and Barclays. 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.

NIC, which is associated with the Ndegwa family, has had a good run in the financial industry and has become a market leader in asset finance.

Though the deal is being marketed as a merger, it is understood that CBA, which has grown exponentially in the last decade to become a tier one bank will be the one with the last laugh and is understood to be the one buying NIC.

CBA’s breakthrough came with the deal with Safaricom to host the banking end of the M-Shwari, a mobile lending application that has seen it bag millions of new accounts. The Central Bank of Kenya (CBK), which regulates the banking industry, has been blowing hot and cold over the issue of consolidation.

Your opinion is valuable. Take this quick survey to help us improve the website and content

Would you like to get published on Standard Media websites? You can now email us breaking news, story ideas, human interest articles or interesting videos on:


Source link

By Kenyan Digest

The Kenyan Digest Team