South Africa’s Nedbank Group has announced plans to acquire a controlling 66% stake in NCBA Group.
If completed, the deal will see NCBA become a subsidiary of Nedbank, while the remaining 34 per cent of shares will stay listed on the Nairobi Securities Exchange (NSE). The proposed transaction values NCBA at 1.4 times its book value.
Under the proposed structure, shareholders who participate in the offer will receive 20% of the consideration in cash. The remaining 80% paid in Nedbank shares listed on the Johannesburg Stock Exchange (JSE).
NCBA currently operates across Kenya, Uganda, Tanzania, Rwanda, Ivory Coast and Ghana. The Group holds KES 665 billion in assets and has posted an average Return on Equity of ~19% since FY2021.
According to Nedbank CEO Jason Quinn, East Africa is a core growth region.
“Kenya’s role as a regional financial hub, supported by strong institutions, sophisticated markets and a dynamic technology sector, makes it a natural anchor for Nedbank’s East African ambitions.”
The bank sees Kenya, Rwanda, Tanzania and Uganda as priority markets, with future expansion opportunities in Ethiopia and the DRC.
Nedbank says it intends to preserve NCBA’s brand, governance, operational model and management team.
NCBA CEO John Gachora called Nedbank an “ideal partner”:
“Their strong balance sheet will help us scale in our current markets and explore new opportunities like Ethiopia and the DRC. We are proud of the brand we have built and look forward to making it central to Nedbank’s East Africa expansion.”
The transaction is subject to regulatory approvals from central banks across the region and is expected to close in six to nine months.
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