For CBA, because of mobile phone account customer numbers will definitely skew the loan per customer, that is an obvious fact.

Though there is alot of excitement on this merger, the 2017 numbers for CBA are not consistent and exciting.

NIC ksh.5bn bond issued in September 2014 matures this year;
Link;https://www.nic-bank.com/ke/nic-bank-upsizes-bond-issue-to-ksh-5-billion-bond-oversubscribed/

NIC Bank Upsizes Bond Issue to Ksh 5 billion; Bond Oversubscribed

Listed lender NIC Bank bid to grow its corporate client base as well as enhance its branch channels to reach more retail and SME customers is on track following the oversubscription of the bank’s bond issue.

The bond is the first issue under the Ksh 8 billion Medium Term Note Program that was recently approved by the Capital Markets Authority. The bond issue that was launched on August 21, 2014 was upsized to Ksh 5 billion from the original Ksh 3 billion.

“In the process of gauging investor interest, it became apparent there was greater demand in the bond issue than the original Ksh 3 billion we were seeking,” said NIC Bank Group Managing Director John Gachora. Gachora added that the additional funds would help to accelerate the banks long term growth plans.

The bond issue targeting institutional and retail investors received offers of Ksh 6.5 billion, representing a 30% oversubscription over the upsized amount of Kshs 5 billion.

Institutional investors offered to take up 90% of the issue, while retail investors accounted for the remaining 10% of the bond issue.

Mr Gachora said the bank was pleased with the outcome of the issue.

“The success of the bond is a vote of confidence on the Bank’s long-term growth strategy. The money raised is critical in strengthening our capital base so as to support growth in our loan book for both the SME and corporate segments,” he said. “This is a major milestone in support of our corporate strategy which calls for robust capital levels and a sustainable funding programme.”

The bank will list the medium-term note at the Nairobi Securities Exchange (NSE).

The bond was available to investors from August 21 to September 3 2014, with a yield of 12.5%.

NIC Capital Limited, a subsidiary of NIC Bank Group, was the lead arranger for the transaction.

According to NIC Capital Managing Director Maurice Opiyo, the bond is an opportunity for investors to diversify their fixed income portfolios at a good return on investment.

“We saw a big appetite for the medium-term note with investors taking advantage of the opportunity. There is an increasing appetite and acceptance of corporate bonds as an alternative source of funding for Kenyan Companies,” said Mr Opiyo.

The bond issue is part of a major capital-raising program initiated by NIC Bank as it seeks to grow its corporate client base as well as to enhance its branch channels to reach more Retail and SME customers across the region.

https://www.businessdail...8082-104wo7j/index.html

The merged CBA and NIC bank will count among its top owners some of Kenya’s most renowned billionaire investors and political figures, shareholder information on the two lenders has revealed.

Records from the Registrar of Companies have revealed the underlying ownership of the privately-held CBA bank, whose investors will control a combined 53 percent stake in the merged outfit that is set to start trading on the Nairobi Securities Exchange later this year with a market capitalisation of more than Sh65 billion.

President Uhuru Kenyatta; his brother Muhoho and former First Lady Mama Ngina Kenyatta will together directly hold stakes worth a combined Sh8.5 billion.
The Phillip Ndegwa family, which founded NIC Bank, will own an equivalent of Sh8.6 billion in the combined entity while billionaire businessman Naushad Merali will hold a stake worth about Sh1.9 billion.

The Kenyattas will control about 13.2 percent of the bank, a level of ownership that nearly matches the 13.25 percent equity that the Ndegwa family will also take in the merged entity.

The Kenyattas currently hold a 24.92 percent stake in CBA while the Ndegwas have a 25 percent interest in NIC. Mr Merali will end up with a 2.9 percent equity based on his present direct ownership of a 5.6 percent stake in CBA.

Besides the high-profile billionaires, CBA has other investors whose identity is cloaked in trusts and nominee accounts. Livingstone Registrars, for instance, has a 24.65 percent interest in the private bank that will in turn entitle it to a 13 percent equity worth Sh8.4 billion in the merged entity.

Officials of Livingstone Registrars said they are holding the shares on behalf of local investors whose identity they declined to disclose.
Ropat Nominees and Ropat Trust Company also have a combined 27.88 percent interest in CBA that will translate into a 14.7 percent stake worth Sh9.6 billion in the merged entity.

Ropat’s directors are listed as Mr Robert Kimani Ndung’u and Mr Patrick Kamau Gacheru. Estimates of the effective ownership in the combined bank are based on the latest available shareholder lists of NIC and CBA banks and records from the Registrar of Companies.
CBA, while announcing the merger plans, disclosed that it had a total of 34 shareholders. However, it did not name them. Shareholders of CBA will get the larger stake in the combined business based on the relatively bigger size of the private bank and the value it brings to the table, including a larger asset base and millions of M-Shwari customers.

The merged entity will become the third-largest bank in the country with assets of Sh444.3 billion based on September disclosures. This will see it relegate Co-op Bank with Sh404.1 billion in assets, to fourth place.

KCB Group and Equity Group rank first and second with assets of Sh684.1 billion and Sh560.3 billion respectively.

The merger is currently valued at Sh65 billion – being the book value of the two institutions based on numbers published in the September quarter.

The business combination is expected to be completed by end of September. Areas of overlap including branch networks, technology, management and support functions are expected to be reviewed with a view to cut costs and improve efficiencies.

At the start of the integration, the company will have 2,360 employees and more than 100 branches in multiple markets, including Kenya and Tanzania.

Upon completion of the transaction, the businesses will be organised into banking and non-banking operations. The banking unit will comprise lending and deposit-taking businesses. It will also include a company to house all the digital banking services, including the microcredit platform M-Shwari.

The non-banking division will comprise stock brokerage, property investment, leasing, insurance agency and other ventures.

Besides holding a stake in CBA/NIC, the current shareholders of CBA are also set to own Jamii Bora Bank separately as a private lender after making a Sh1.4 billion cash offer to fully acquire the small bank.

The buyout of Jamii Bora is expected to be completed in the next few weeks.

Motivations of the Merger IMO:
1. CBA shareholders want to list, hence the merger with listed NIC;
2. New capitalisation requirements for banks. Other small and medium sized banks are also bulking up.
3. Ndegwas looking to divest some of their investments in banking. Remember NIC Group acquired ICEA, Lion Insurance, Solid Stock Brokers.
4. Good fit between the two banks