CBA and NIC Banks inched closer their merger after the respective boards approved the proposed union.
While CBA is majority-owned by the Kenyatta family, NIC is associated with the family of former Central Bank Governor late Philip Ndegwa.
The Kenyattas and Ndegwas are among the wealthiest families in Kenya and East Africa, with vast interests in banking, insurance, hospitality, manufacturing and real estate.
The expected merger will create the second largest bank in Kenya in terms of customer deposits and third largest in assets.
The new entity will have asset base of 444 Billion and shareholder equity of 65 billion.
The new bank will have more than 100 branches in Kenya, Uganda, Tanzania, Cote’ d'Ivoire and Rwanda serving over 40 million customers
The merger will be executed through a share swap with share exchange ratio of 47:53 relative valuation of NIC and CBA respectively.
“The complementary business profiles of the two banks are conducive for the delivery of value to all stakeholders, including shareholders, customers and staff,” said NIC Group chairman James Ndegwa during a media briefing on the merger.
On his part, CBA chairman Desterio Oyatsi said the merger presents the two institutions with the opportunity to play a critical role in the economies of chosen markets.
He said: “In particular, the merged entity will have the requisite scale and capability to contribute to the realization of Kenya’s Big 4 agenda.”