South Africa’s Nedbank to Acquire 66% Stake in Kenya’s NCBA Bank for $856 million South Africa’s banking giant targets Kenya as the launchpad for deeper expansion across East Africa’s fast-growing financial markets

South Africa’s Nedbank Group has unveiled plans to acquire approximately 66% of the issued ordinary share capital of Kenya’s NCBA Group. 

The move is set to hand the Johannesburg-listed lender effective control of one of East Africa’s most prominent banking groups while keeping NCBA listed on the Nairobi Securities Exchange.

The Reuters news agency reported that the cash-and-stock deal is valued at $855.5 million (KES 110.3 billion).

The proposed transaction was disclosed on Wednesday after Nedbank served a formal Notice of Intention on NCBA Group, the Capital Markets Authority of Kenya, the Nairobi Securities Exchange, and the Competition Authority of Kenya. 

NCBA confirmed that it had received a strategic investment proposal alongside the notice, under which Nedbank seeks to acquire the shares from existing NCBA shareholders through a tender offer.

If successfully completed, the transaction will result in NCBA becoming a subsidiary of Nedbank. 

The remaining 34% of NCBA’s issued shares will continue to be held by public investors and remain listed on the Nairobi Securities Exchange.

The offer is structured as a partial pro rata tender offer for approximately 1,087,362,891 ordinary shares, each with a par value of KES 5, representing 66% of NCBA’s issued share capital. 

Each shareholder will be entitled to tender up to 66% of their existing holding, with the opportunity to tender excess shares subject to allocation and scaling mechanisms that will be set out in the formal offer document.

Under the proposed consideration structure, participating shareholders will receive 20% of their consideration in cash and the remaining 80% in Nedbank ordinary shares listed on the Johannesburg Stock Exchange. 

For every 100 NCBA shares tendered, shareholders will receive 4.02994 Nedbank shares and a cash payment of KES 2,100. 

The Nedbank shares will be issued at a price of ZAR 250 per share, using a KES to ZAR spot exchange rate of 7.7143 as at December 18, 2025.

Fractional entitlements will be rounded down, with the cash value of the fraction added to the cash component.

Certain shareholders will receive full cash consideration. These include institutional investors who are restricted by law or regulation from holding offshore listed securities, subject to confirmation acceptable to Nedbank, as well as shareholders whose entitlement would result in fewer than 200 Nedbank shares. 

In those cases, the consideration is deemed to be KES 10,500 per 100 NCBA shares on a pro rata basis.

The transaction values NCBA at a multiple of 1.4 times its book value, according to NCBA’s statement, a pricing metric that places the lender at the upper end of valuations for listed banks in the region.

The offer also includes a dividend parity mechanism to ensure that shareholders who accept the offer receive the economic benefit of either an NCBA dividend or a Nedbank dividend for the same financial period, but not both. 

Shares acquired under the offer will be free of all encumbrances and will carry all future rights, including dividends declared after completion, subject to this mechanism.

Following completion, Nedbank is expected to hold 66% of NCBA, with the remaining 34% in public hands. 

Nedbank noted that in certain scenarios its stake could marginally exceed 66%, but not by more than five percentage points. The offer will be governed by Kenyan law.

Nedbank said the acquisition is aligned with its strategy to expand beyond Southern Africa and deepen its presence in high-growth East African markets. 

The group described East Africa as strategically important due to its strong macroeconomic fundamentals, large and growing population, attractive growth prospects and its role as a major trade corridor linking Africa with the Middle East, India and Asia.

NCBA’s market position was a central pillar of the strategic rationale. Formed from the merger of NIC Group and Commercial Bank of Africa, NCBA has built a strong regional footprint and a reputation for advanced digital banking services, asset finance leadership, and investment banking expertise. 

The group operates across Kenya, Uganda, Tanzania and Rwanda, with digital operations in Ghana and Ivory Coast. It runs 122 branches and serves more than 60 million customers.

Financially, NCBA manages assets of about KES 665 billion and disburses over KES 1 trillion in digital loans annually. 

Since the 2021 financial year, the group has delivered an average return on equity of approximately 19%, making it one of the more profitable banking franchises in the region.

Following the proposed acquisition, NCBA is expected to become the cornerstone investment vehicle for Nedbank’s East African strategy, while remaining listed on the NSE and retaining its brand identity. 

NCBA said its customer and human capital decisions will remain anchored locally. Nedbank currently operates only a representative office in East Africa, and as a result there will be no need for in-country integration of systems and operations.

The two groups said the transaction is expected to generate significant synergies. 

Nedbank is expected to strengthen NCBA’s corporate and investment banking capabilities through its global presence, regional and sector expertise and capacity for cross-border collaboration. 

At the same time, access to Nedbank’s larger resource base is expected to reinforce NCBA’s existing infrastructure and support the scaling of operations in Kenya and the wider East African region. 

As a subsidiary of Nedbank, NCBA staff are expected to gain access to broader training and career development opportunities across multiple geographies, while customers benefit from a deeper talent pool and increased lending capacity.

Nedbank has indicated that it intends to preserve NCBA’s brand, governance structures, operational model and management team.

Commenting on the proposed transaction, NCBA Group Managing Director John Gachora said Nedbank was an ideal partner for the group’s next phase of growth in East Africa. 

He noted that Nedbank holds an estimated 16 to 17% market share of loans and deposits in South Africa and is a market leader in vehicle finance and commercial property finance, with roughly 36% market share in each segment. 

He added that Nedbank’s overall environmental, social and governance ratings place it in the top 10% among global peers, and that its strong balance sheet would help NCBA scale in its current markets while exploring opportunities in new markets such as the Democratic Republic of Congo and Ethiopia.

“We are proud of the brand we have built and look forward to making it central to Nedbank’s East Africa expansion,” Gachora said.

Nedbank Group Limited is headquartered in South Africa with a primary listing on the Johannesburg Stock Exchange and a secondary listing on the Namibia Securities Exchange.

It is among Africa’s largest financial institutions, with established operations across Southern Africa and an international presence that includes London, Dubai, the Isle of Man and Jersey.

As at December 25, 2025, NCBA’s ten largest shareholders collectively held 72.78% of the issued share capital.

The largest shareholder was First Chartered Securities with 14.9%, followed by Enke Investments with 13.2%, D&M Management Services LLP with 10.5%, Brookshire with 8.6% and Westpoint Nominees with 7.7%.

Others include Yana Investments with 5.4%, Kahuho Holdings with 4.1%, Rivel Kenya with 3.9%, Makimwa Consultants with 2.9%, and Kestrel Capital Nominee Services with 1.58%.

Nedbank has already secured irrevocable undertakings from shareholders representing 71.2% of NCBA’s issued shares, committing them to accept the offer in respect of their pro rata entitlements and, where applicable, to participate in excess applications.

The transaction remains subject to regulatory approvals in multiple jurisdictions, including approvals from the Central Bank of Kenya, the Capital Markets Authority, the Competition Authority of Kenya, the Tanzania Fair Competition Commission, the East African Community Competition Authority, and the Comesa Competition and Consumer Commission. 

Nedbank also plans to apply for an exemption from Kenya’s mandatory takeover rules, arguing that the transaction constitutes a strategic investment rather than a full takeover. 

If the exemption is not granted by May 31, 2026, Nedbank may convert the transaction into a full offer for all NCBA shares, subject to safeguards that limit its final shareholding to close to the targeted 66%.

Subject to the receipt of all regulatory approvals and the fulfilment of conditions, Nedbank expects the transaction to be completed by the third quarter of 2026.