A legal notice dated 26th June and released to the public on Friday shows that treasury exempted CBA and NIC bank from paying share transfer taxes following the merger between the two lenders.
The merger deal will see CBA shareholders own 53 percent while NIC shareholders will own 47 percent of the newly formed entity.
In the notice, the former Cabinet Secretary in charge of National Treasury Henry Rotich said,” 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 the change in ownership of shares and property incur stamp duty charges which range from 1 percent to 4 percent of the asset’s value.
Investors in the two banking institutions approved the union earlier this year during their AGMs. CBA shareholders will exchange their CBA shares for 53 percent of the new shares in joint entity while NIC group shareholders will get 47 percent of the new entity.
The company will have 2360 employees and more than 100 branches in Kenya and Tanzania. The merged entity will be the regions third largest bank with an asset base of KSh466 billion. In addition, the merger is expected to create one of Africa’s biggest banks by customer numbers with over 41 million customers.