The Competition Authority has okayed the merger between CBA and NIC banks charting the path for the creation of the second largest bank in the country.
The authority has approved the merger on condition that no employee will lose their job in the next 12 months and the banks will not close any of the existing branches.
The long-awaited merger between Commercial Bank of Africa (CBA) and NIC Group Plc has finally been approved by the Competition Authority of Kenya (CAK) https://t.co/Imjuv2awRw #SokoNews pic.twitter.com/qrr3kDuV4c
— Sokodirectory.com (@sokodirectory) May 13, 2019
The merger between NIC Bank and Commercial Bank of Africa was announced in December last year through a share swap agreement where CBA will control 53 of all issued shares while 47 percent will be allocated to NIC bank.
The merged entity, NIC Group, is set to remain listed on the Nairobi Securities Exchange.
The CBA-NIC merger has however been approved on the condition that the two entities should retain all their employees for at least one year https://t.co/Imjuv2awRw #SokoNews pic.twitter.com/eO3zbfYHXy
— Sokodirectory.com (@sokodirectory) May 13, 2019
The combined franchise will boast of 26 million customers in Kenya and 42 million regional customers at group level made up of CBA’S 41 million and NIC’s 1 million customers, making it the largest bank in the region by customer base.
On Monday, the Competition Authority of Kenya cleared the last hurdle to the union between the two banks.
The authority says after evaluation all evidence it does not hold the opinion that the merger will disrupt the market. The market share of merged entity will be 10.67% making it the second largest bank.
The franchise will hold a 9.6% market share of total banking sector assets at 415.3 billion shillings.
The combined entity will expand its reach in Kenya through a network of 85 branches and 74 ATM machines.
The Competition Authority of Kenya approved the proposed merger on condition that the merged entity will not declare redundant any of the 1,872 employees for a period of 12 months from the date of closing of the transaction.
In addition, the merged entity has indicated that they do not plan to close any of the combined 85 branches, noting that in locations where there are overlaps, the merging parties intend to open new branches in other locations.