A legal notice which released to the public on Friday the 16th of August 2019, revealed that the Treasury has exempted Commercial Bank of Africa (CBA) and NIC Bank from paying share transfer taxes which will occur after the merger between the two financial institutions.
The merger deal will see Commercial Bank of Africa (CBA)’s shareholders owning 53 percent while NIC Bank’s shareholders will own 47 percent of the newly formed entity.
In the notice which is dated 26th of June 2019, the former Cabinet Secretary in charge of National Treasury Henry Rotich stated that,” The Cabinet Secretary for the National Treasury and Planning,… directs that the instruments executed in respect of the transactions relating to the merger of NIC Group PLC and Commercial Bank of Africa shall be exempt from the provisions of the Act.”
Transactions such as a change in ownership of shares and properties, normally incur stamp duty charges which range from 1 percent to 4 percent of the targeted asset’s value.
Earlier this year, investors in the two banking institutions approved the union earlier this year during their Annual General Meetings.
Commercial Bank of Africa (CBA) shareholders will exchange their CBA shares for 53 percent of the new shares in joint entity while shareholders at NIC Group, will get 47 percent of the new entity.
The merger is projected to create one of Africa’s biggest banks by customer numbers with over 41 million customers.
The newly formed company will have 2360 employees and more than 100 branches across Kenya and Tanzania and will be East Africa’s third largest bank with an asset base of 466 billion Kenyan Shillings.
