The National Bank of Kenya (NBK) will now operate separately despite being merged with the Kenya Commercial Bank (KCB).
KCB had plans to integrate NBK into its operations but the bank now fears that if such is done loss of customers and deposits attached to national bank may occur.
When the merger was announced the effect was felt as the deposits of NBK dropped from 91.3billion to 82.5billion though it was not automatic that customers and deposits attached to the NBK would move to KCB.
The decision to merge the two was as a result of NBK experiencing low liquidity.
New NBK managing director, Paul Russo who was tapped from KCB to oversee the integration said that the two banks have different competences and propositions adding that closing NBK will have major challenges since it is not automatic that all customers will remain.
KCB is set to increase its share of government banking business due to the merger.