CBA/NIC MERGER WOULD CREATE THIRD-LARGEST BANK

An NIC Bank branch on Kenyatta Avenue in Nairobi. NIC and CBA have announced that they are engaged in merger talks.

A bout a fortnight ago, Kenya’s banking industry woke up to merger talks between NIC Bank and Commercial Bank of Africa (CBA), a move that could tilt the balance of power among the country’s big banks and increase competition for deposits and government business.

Whether the new bank will be listed on the Nairobi Securities Exchange — since the proposed merger is between listed NIC Bank and non-listed CBA — depends on consent between the two lenders.

“That is a decision to be made by the two entities. They have just started discussions and we have not heard from them yet. There are a lot of procedures, consultations and processes to be followed. But it is our desire that they be listed,” said NSE chief executive Geoffrey Odundo.

If successful, the merger between the two mid-tier banks would create the country’s third-largest bank by assets at Ksh444 billion ($4.44 billion) with a customer base of 38 million.

The new bank would be in a pole position to wrestle the likes of KCB, Equity and Co-op Bank in the scramble for government deposits and securities.

Co-op Bank would move from third to fourth position in terms of asset base.

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