By Rogers Wanambwa
KIU, Main Campus - Following a request sent to the Central Bank last year by two Kenyan-based banks, NIC Bank and Commercial Bank of Africa to merge operations in Uganda, the two banks are now expected to go through with the merger as the second quarter rolls in. This is subject to regulations approval.
“BoU has issued a letter of no objection to the proposed business [merger] of NC Bank and Commercial Bank of Africa," a letter notice signed by Sam Ntulume, the NIC Bank Managing Director and Anthony Ndegwa, the CBA Chief Executive Officer, reads in part.
John Gachora (in the picture), Managing Director of the NCBA Group in Kenya said that the mergers in Uganda and Tanzania are expected to be finalized in the second quarter of 2020, while the two banks have already finalized merging their operations in Rwanda.
“Our operating income in the fourth quarter totalled Ksh 11.6 billion. We have continued to register very impressive growth in advances and deposits over the last two quarters despite being in a merger process,” Gachora said.
NCBA realized a Net Interest Income rise of Ksh3.6billion in 2019 as it earned Ksh13.3billion from Ksh9.7billion in 2018. It also saw net loans and advances to customers double to Ksh249.4billion.
Merging costs in the period were Ksh2.1billion and these were from amortization of intangible assets and goodwill write-offs are expected to remain as a recurring item in 2020. This is because the Group is seeking to complete the transition process in its subsidiaries.
NC Bank recovered from a Shs4.3b loss for the period ended December 2018 to post Shs3b in profits in 2019 while CBA made a loss of Shs10.4b in 2019 from a Shs567m profit in 2018.
The merger of NC Bank and Commercial Bank of Africa (CBA) will create a bank with an asset base of UGX548billion.
Sources: The Independent and Daily Monitor
Picture credit: NIC Bank