NAIROBI (Reuters) - Merger talks between NIC Bank and Commercial Bank of Africa were welcome, because a deal would help strengthen the financial sector, Kenya’s finance minister said on Friday.
The two Kenyan banks announced on Thursday that they would hold talks on a potential merger, which would be the first major deal since the government capped commercial lending rates in 2016. [nL8N1YB4PP]
“Consolidation of the financial sector is something of importance,” Henry Rotich said. “Treasury has been supportive of a sector that is well served by stronger banks.
“So as you see more banks consolidating on voluntary basis, that is a welcome move, so that we can ensure that the banks are strong enough to provide sufficient credit to SMEs.”
Agreements among lenders would also help to spread their wings around the region, Rotich said, and consolidation was likely to continue.
Reporting by George Obulutsa, writing by Duncan Miriri, editing by Larry King