No employees should be sacked in CBA-NIC Group merger, banks told

The Competition Authority of Kenya approved has a proposed merger between Commercial Bank of Africa (CBA) and NIC Group, the regulator said in a statement.

It said the approval was on the condition that no employees would be made redundant in the merged unit within 12 months of the deal’s completion.

The merged bank will have an asset base of Ksh.444billion ($4.41 billion), making it the region’s third-largest after KCB and Equity.

The transaction will take place though a share swap between the two banks, with current NIC group shareholders owning 47 pct of the merged entity and CBA shareholders owning 53 pct of the merged entity.

NIC group will remain listed, Gachora said.

In December last year, the two banks said they would hold talks on a potential merger to combine their expertise in retail and corporate banking.

NIC is a leading bank in asset financing and has a strong base of mid-sized corporate clients.

CBA has a strong retail client base, including digital-only customers on its M-Shwari mobile platform.

National Treasury CS Henry Rotich lauded the move saying it would help strengthen the financial sector.

“Consolidation of the financial sector is something of importance,” he said. “Treasury has been supportive of a sector that is well served by stronger banks.

“So as you see more banks consolidating on voluntary basis, that is a welcome move, so that we can ensure that the banks are strong enough to provide sufficient credit to SMEs,” he added.

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