potential merger of NIC Group PLC (NIC) and Commercial Bank of Africa Limited (CBA)

On 6^th December 2018, NIC Group PLC (NIC) and Commercial Bank of Africa Limited (CBA) announced that their respective Boards of Directors had authorized the commencement of discussions regarding a potential merger of the two entities. The proposed merger would be executed through a share exchange, with a share ratio between NIC and CBA being 47:53 respectively. Subsequently, CBA and NIC held Annual General Meetings where its shareholders overwhelmingly approved the mergers. The Central Bank of Kenya through Kenya Gazette Notice No. 9038 approved the amalgamation of Commercial Bank of Africa Ltd and NIC Group PLC effective 30th September 2019 prompting NCBA Kenya PLC listing an additional 793.8 million new shares on the Nairobi Securities Exchange as Corporate Watch Magazine’s KJ Odongo reports.

Listed financial services group, NCBA Group PLC, has listed 793.8 million new shares on the Nairobi Securities Exchange following the merger of NIC Group PLC and Commercial Bank of Africa Limited (CBA).

The merged entity will trade as NCBA at the NSE. The previously listed entity, NIC Group’s issued and paid up share capital stood at KES 3.5 billion comprising 703.9 million ordinary shares of KES 5 each.  NCBA now has a total of 1.49 billion issued shares with a par value of KES 7.45 billion.

NCBA Group PLC officially commenced operations on Tuesday, 1^st October 2019 following approval by the Central Bank of Kenya and the National Treasury on 27 September 2019. Shareholders of both institutions had earlier, in April 2019, approved the merger.

Speaking during the bell ringing ceremony to kick off the trading of the new shares, NCBA Group Chairman James Ndegwa, noted that the listing of the new shares is part of the Banks journey towards building a strong institution in which Kenyans and other investors can be a part of.

“We are grateful to our investors who gave us the nod to get to where we are today, effectively creating the third-largest financial institution in the country. NCBA maybe three weeks old but together we bring over one hundred years of banking experience. We have been busy having unveiled the new inspiring NCBA logo, as part of our journey to bring our merger under one unified banner, we are currently rolling out our visual identity across all customer touch points in the region,” Ndegwa said.

NCBA Bank Kenya PLC Chairman designate Isaac Awuondo said, “NCBA shareholders will be able to derive more value from their investment as the bank is set to enjoy several benefits including leveraging on the strengths of a large financial institution to explore growth opportunities, economies of scale, financial and operational efficiency, business diversification and synergies among other benefits.”

He continued, “Listing of NCBA is truly a monumental occasion as it presents an opportunity for more Kenyans to be part of our growth.  We have great ambitions and in the coming days we will seek to enhance our retail and business banking delivery model so that it is geared to serving the growing needs of our customers sustainably.”

NCBA Group Managing Director, John Gachora said, “The successful launch of NCBA has opened a new chapter in the growth and expansion of our business not only in Kenya but in the region, which comes as welcome news to our shareholders.

The listing of additional shares is set to increase the vibrancy of the NSE through greater liquidity of our shares.”

“The future’s looking brighter as we roll out an expanded range of products and services as a stronger and larger financial institution. Currently, we are working tirelessly to ensure our systems are harmonized by 1^st November in a bid to offer our customers seamless services across all our channels in Kenya.”

NIC Group, the forerunner to NCBA, was first listed on the NSE in 1971 and had approximately 26,000 shareholders.

Speaking at the event the Chairman of the Nairobi Securities Exchange Mr. Sam Kimani congratulated NCBA for the successful merger and the listing of additional shares.

“Investors will always support a company whose values are embedded in the future of Kenya and I can say these two Kenyan entities have come together to form a strong financial services institution in the country with tentacles in the region,” he said.

NSE Chief Executive, Geoffrey Odundo, said “As the NSE, we remain committed to fulfilling our duty of providing exceptional trading services and urge all our investors to look no further than the NSE for their investment needs.”