The expected merger between Stanbic Bank(the largest player in Africa) and CFC Bank (among the oldest banks in Kenya)  should send a major signal on alignment  in the industry especially in the corporate and NGO market segment. 

The main factor to consider is that the majority of people in Kenya bank with hwat I would call 'their banks', that is South African affiliated companies will bank with Stanbic, Asians will enjoy the services of Asian owned banks and so on. We must not forget either  that almost all the large individual and family players in the Kenyan economy have a stake in a particular bank e.g. Naushad Merali - CBA and Equatorial Banks, Diamond Trust and the Aga Khan, Manu Chandaria with Fina and Guardian Banks , former President Moi's family with Transnational Bank , Nicholas  Biwott with the Middle East bank, the Sarit family with I&M Bank ,etc. It is not as individuals though that these high net-worth individuals are most influential in banking, but through the very profitable corporate accounts that they hold or control.

Thus ,with mergers coming up like this Stanbic-CFC one and the forthcoming alliance between Habib Bank AG Zurich and Diamond Trust Bank there will be a realignment in the industry that may result in Kenyan banking taking the shape of the Nigerian Industry where  consolidation of the Nigerian banks (PDF) achieved a massive change in the sector's outlook.  At the end of the Central Bank of Nigeria's initiative, of the initial 89 original banks, 25 bigger and supposedly better banks emerged. Eighteen banks did not make the cut and were liquidated. In Kenya though, this consolidation will not be driven by Government fiat but by competition, a positive move for everyone. 

The CFC and Stanbic marriage does not necessarily throw National Bank of Kenya from the picture as the Government has promised to inject more funds into this company in an attempt to clean its balance sheet and in particular the large bad loans portfolio that is a turn off to any likely suitor for NBK. 

Stanbic might still be interested in NBK due to its more penetrative branch network, a factor that should complement their strong presence in Nairobi and Mombasa.  In the near future then, Stanbic-CFC would be  likely to close a few branches in Nairobi and possibly concentrate on opening more in other towns.