Kampala, Uganda | Isaac Khisa | Kenyan-based lenders, Commercial Bank of Africa and NC Bank, are expected to finalize their merger in the second quarter of this year subject to the regulatory approval. The two banks submitted their request to merge their operations to Bank of Uganda late last year.
Releasing the NCBA Group financial performance in Nairobi, Kenya, its Managing Director, John Gachora, said the mergers in Uganda and Tanzania will be going live in the second quarter of this year. NC and CBA banks have a combined 5 and 17 outlets in Uganda and Tanzania, respectively.
The two banks have already merged their operations in Rwanda. Meanwhile, NCBA Group posted a 56 percent growth in profit after tax for the period ending December 2019 to Ksh. 7.8 billion from merger gains.
The results announced on March 25 incorporate the nine months results of the CBA plus the fourth quarter results of the merged entity.
The lender’s total operating income grew by 59 percent to Ksh. 33.7 billion from Ksh. 21.2 billion posted in the previous year.
The bank also realized a Ksh. 4.1 billion windfall from a bargain purchase resulting from the merger between CBA and NIC completed in October last year.
“Our operating income in the fourth quarter totaled 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.
Net interest income rose to Ksh. 13.3 billion from Ksh. 9.7 billion in 2018 with net loans and advances to customers doubling to Ksh. 249.4 billion shillings.
Merger costs in the period topped Ksh. 2.1 billion from the amortization of intangible assets and good-will write-offs.
The merger costs are expected to remain as a recurring item in 2020 as the Group seeks to complete the transition process in its subsidiaries.
The Group’s highlighted strategic priorities for the year include the scaling up of its retail banking and deepening its strength in corporate banking and asset finance.
“Now that we have concluded the merger and established a much stronger bank, I am positive and confident in the business growth prospects going forward.” Added Gachora NCBA has an asset base of Ksh. 494.8 billion in the post-merger and a core capital base and liquidity ratio of Ksh. 63.8 billion from Ksh. 24 billion and 51.8 percent respectively.