Kenya’s central bank said on Friday that it had approved the merger of Commercial Bank of Africa and NIC Group, making it the second major merger in the sector this year.
The central bank said in a statement in Nairobi that following the merger, effective Oct. 1, 2019, all subsidiaries would operate under a non-operating holding company, NCBA Group Plc.
The two banks first announced the deal in January, in which current NIC Group shareholders would own 47% of the merged entity and CBA shareholders 53 percent.
In March, Commercial Bank of Africa said its shareholders had accepted a share swap with NIC Group.
The merger was agreed by NIC Group’s shareholders on April 17, paving the way for the two companies to create the third-biggest bank by assets in East Africa.
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The central bank said the merged entity will have a combined market share of 9.9% and a customer base of over 40 million people in East Africa.
The two banks have not disclosed the monetary value of the transaction to the market.
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.
After the merger, the banks said they would also have a presence on mobile platforms in Tanzania, Uganda, Rwanda and Ivory Coast, in collaboration with telecoms firms in the four countries.
The merged group will also have more than 100 branches, spanning Kenya, Tanzania, Uganda, Rwanda and Ivory Coast.
The merger is the second major one in the sector since the government imposed a cap on commercial interest rates in 2016.
Earlier this month, the central bank also approved KCB Group, the region’s biggest bank by assets, taking over National Bank of Kenya.