(Ecofin Agency) - On January 31, 2019, Kenyan bank NIC Bank announced that it would finalize its merger with its compatriot Commercial Bank of Africa (CBA) in Q3, 2019.

John Gachora, NIC Bank’s managing director, announced that they would seek shareholders and regulators’ approval in Q1 and Q2, 2019 respectively and proceed to the official merger in the third quarter.

Once the merger is completed, the current NIC Bank’s shareholders will own 47% of the newly created entity while 53% will be for Commercial Bank of Africa’s shareholders. The new entity’s total asset will be Ksh444 billion ($4.41 billion), thus being the third largest bank after Kenya Commercial Bank and Equity Bank.

NIC Bank is a middle-sized bank while CBA is among the largest in East Africa’s largest economy. The planned merger would be the first major transaction in Kenya’s banking sector since the interest rate cap decided by authorities in 2016 for commercial loans.

Commenting on the merger, Kenyan minister of finance Henry Rotich indicated that “the deal between NIC Bank and CBA is welcomed”, noting that an agreement will boost the local banking sector.