Management changes at NIC and CBA banks have started after the two financial institutions announced that the current NIC Group managing director John Gachora will keep his job and also act as CEO of the combined entity that will be born out the merger.
This will see Mr Gachora in charge of the day to day management of the group’s businesses
On his part, the current CBA boss Isaac Awuondo will leave the corner office to take up the chairman’s role of the banking subsidiary that will come out of the merger.
Mr Awuondo will also maintain direct oversight over the digital business of the combined entity.
“In this role, Isaac will continue to provide the day to day leadership of the digital business as we develop its long term strategy,” the lenders said in a joint statement released Wednesday.
The lenders plan to create a distinct digital business that will have its own board. “One of the key strengths of the combined entity will be its digital banking capability.
To extract full value from this capability, we intend to create a distinct digital business with a separate board,” the statement adds.
This means Mr Awuondo will continue running M-Shwari, a mobile lending platform that gave CBA a head-start in the now crowded mobile loans business.
According to the fresh details of the merger, the merged Group will operate under a new name and brand, which will be determined prior to concluding the merger.
“The combined entity’s board of directors and executive management team will also be well balanced between the two institutions,” the joint statement said.
Upon approval by the regulators, the listed NIC Group will be renamed and the renamed entity will be the merged Group’s non-operating holding company with subsidiary banks and other institutions in the countries where we operate.
But the operation commercial bank in Kenya will be the current CBA, which will also be renamed. The changes at the board and the top leadership promises to open the next chapter of job losses after the banks are fully merged.
The merger of the two promises to bring together a cash rich entity that will give top banks such as KCB, Equity and Cooperative bank a run for their money.
“In the interim and until the merger is approved by all requisite regulators, the two companies will continue to operate independently,” the statement adds. It is signed by James Ndegwa and Desterio Oyatsi who are the current chairmen at NIC Group and CBA respectively.
CBA has grown exponentially in the last decade to become a tier one bank running over its partnership with Safaricom’s M-Pesa.
It was first to the market with M-Shwari. Other banks have come to the party to wrestle it from the market leadership position in the sector.
NIC on its part, has built its profile as an asset lending bank, which has seen it become one of the favourite financier for heavy earth moving equipment.
With the growing importation of machinery for construction sites, the bank is seen as a strategic bet for lenders who want a piece of the action in that space.
CBA is currently the seventh biggest bank in the country controlling a 6.05 per cent market share, according to the latest banking sector supervisory report. NIC on its part controls 4.62 per cent.
Combined, the two will have a market share of 10.67 per cent, which places the planned new entity above Cooperative Bank (9.93 per cent) and Below KCB Bank (14.14 per cent)