Connect with us

Business News

NIC Bank Shares Spike 45% on Merger Talk With CBA Group



Shares of NIC Bank Kenya spiked Friday following the announcement that it was in talks to merge with Commercial Bank of Africa (CBA Group), a deal that if it goes through could create Kenya’s third largest lender in terms of assets in excess of Sh 400 Billion.

NIC’s shares spiked by over 45% from the opening price of Sh 22.65 to sh 33 before sliding to Sh 30 as of mid-day trading.

In a joint statement sent through the Nairobi Securities Exchange, the two lenders said that their Boards had given the go-ahead on the commencement of discussions regarding a potential merger.

“Upon successful conclusion of these discussions and subject to approvals from shareholders of the two entities and regulatory authorities it is expected that the envisaged merger would create one of the largest financial services groups in the region.” read the notice in part.

The announcement by the lenders is the latest example of consolidation in Kenya’s banking sector occasioned by squeezed profit margins since theintroduction of rate caps in August 2016.

Other deals that have happened over the last two years include; the Acquisition of 100% stake in Giro Bank by I&M Bank in Feb 2017, DTB’s acquisition of Habib Bank in March 2017 and SBM Bank’s acquisition of Chase Bank and Fidelity Bank.

Source link