By PATRICK ALUSHULAMore by this AuthorSouth Africa agency Global Credit Ratings (GCR) expects the proposed merger between Kenyatta family-linked Commercial Bank of Africa (CBA) and NIC Bank to drag earnings for up to three years. The agency says despite long-term benefits expected from the merger, operational and technical risks of combining two banking systems, funding structures and cultures may slow down future earnings. However, the combined bank is expected to emerge as the third biggest lender in Kenya by total assets and the second biggest by customer deposits. This may ultimately result in lower funding costs for the combined bank through improved ability to mobilise deposits, according to the rating agency. However, if the merger proves to be difficult, raising operational risks and damaging the operating performance, capital and funding stability, GCR says it will lower the ratings.

Source: Daily Nation February 26, 2019 18:45 UTC