South Africa’s Nedbank Group has submitted a strategic investment proposal and notice of intention to acquire a controlling stake in NCBA Group PLC, signalling a significant push into East Africa’s banking market.
Under the proposed transaction, Nedbank intends to acquire approximately 66% of NCBA’s ordinary shares through a tender offer to existing shareholders. If completed, NCBA would become a subsidiary of Nedbank, while the remaining 34% of shares would continue trading on the Nairobi Securities Exchange (NSE).
The deal values NCBA at 1.4 times book value, a notable premium in a region where listed banks often trade close to or below book, reflecting both NCBA’s profitability profile and Nedbank’s strategic interest in the platform.
Based on NCBA’s latest financials, the valuation implies an enterprise value of approximately $856 million (≈ KES 110 billion), positioning the transaction among the largest cross-border banking deals in East Africa in recent years.
Shareholders who participate in the tender offer would receive 20% of the consideration in cash, with the remaining 80% settled through Nedbank ordinary shares listed on the Johannesburg Stock Exchange (JSE).
The transaction remains subject to regulatory approvals across multiple jurisdictions, including central banks in markets where NCBA operates, and is expected to close within six to nine months.
A regional platform play
NCBA operates across Kenya, Uganda, Tanzania, Rwanda, Côte d’Ivoire and Ghana, with 122 branches and a strong digital lending franchise. The group disburses over KES 1 trillion in digital loans annually, holds KES 665 billion in assets, and has delivered an average return on equity of around 19% since 2021, positioning it among the more profitable banking groups in East Africa.
Beyond lending, NCBA serves more than 60 million customers through mobile and digital channels, giving it one of the region’s deepest footprints in retail payments, merchant acquiring and wallet-based transactions.
For Nedbank, which currently has only a representative office in the region, the acquisition offers an immediate operational footprint without the execution risk of greenfield expansion or complex systems integration. This move follows its recent decision to offload a 21% stake in Ecobank in August 2025.
NCBA is expected to remain locally branded, NSE-listed, and operationally independent, with governance and management anchored in Kenya.
Jason Quinn, Chief Executive of Nedbank, framed the deal as a deliberate pivot beyond the group’s home market, describing East Africa as “a key growth region” for the bank’s next phase.
“Nedbank has a strategic objective to grow and diversify outside of its core Southern Africa market, and we identified East Africa as a key growth region,” Quinn said, adding that Kenya’s role as a regional financial hub made it “a natural anchor for Nedbank’s East African ambitions, including Rwanda, Tanzania and Uganda.”
Strategic implications
The transaction reflects a broader trend of South African banks seeking growth outside a saturated domestic market, with East Africa emerging as a preferred destination due to favourable demographics, expanding credit demand, and increasingly sophisticated financial infrastructure.
The acquisition also carries significant implications for the region’s payments ecosystem. A stronger capital base could allow NCBA to scale investments in mobile banking platforms, real-time payment rails, API-driven merchant services and fraud monitoring systems, supporting higher transaction volumes and improved system resilience.
Kenya’s role as a regional financial hub is central to the strategy. From Nairobi, NCBA provides access to markets with a combined population of roughly 190 million people and a GDP approaching USD 300 billion, with longer-term optionality in Ethiopia and the Democratic Republic of Congo, where banking penetration remains low, but growth potential is significant.
By combining Nedbank’s Southern African corporate banking clients with NCBA’s East African network, the merged group could also improve cross-border settlement efficiency, reducing reliance on correspondent banking and lowering FX costs for trade and remittance flows — particularly for SMEs and regional merchants.
Group Managing Director John Gachora emphasised balance sheet strength and institutional fit, rather than short-term valuation upside.
“Nedbank is an ideal partner for our growth in the East Africa region,” Gachora said. “Their strong balance sheet will help us scale in our current markets as well as explore the investment proposition that the DRC and Ethiopia have to offer.”
What to watch next
Regulatory response will be critical, particularly around ownership concentration, capital adequacy, and cross-border supervisory coordination. For NCBA, the deal could materially enhance balance sheet capacity and corporate and investment banking capabilities. For the region, it marks another step toward greater consolidation and cross-border integration in African banking.
Regulators are also expected to assess the transaction’s impact on systemic payment networks, including settlement risk, liquidity management and cross-border transaction flows, as volumes scale.
Crucially for regulators and minority shareholders, Nedbank has committed to preserving NCBA’s brand, governance structures, operational model and management team, while keeping the group listed on the Nairobi Securities Exchange — a structure that mirrors recent best practice in African cross-border banking deals.
Bigger picture: East Africa becomes the next consolidation frontier
The proposed NCBA transaction is the latest in a widening wave of cross-border acquisitions and balance sheet consolidation by African banking groups, as lenders pursue scale, diversified earnings and regional relevance.
West African lenders, in particular, have been among the most aggressive. Access Bank Plc has executed a multi-year pan-African expansion strategy spanning Kenya, Rwanda, Zambia, Mozambique and South Africa, using acquisitions to fast-track market entry rather than organic build-outs.
Similarly, Ecobank Transnational Incorporated has continued to deepen its single-balance-sheet model across more than 30 African markets, betting on operating leverage and regional corporates.
These strategies increasingly centre on building regional payment corridors, enabling corporates and SMEs to move money faster and more cheaply across borders.
In East Africa, consolidation has accelerated as regulators raise capital adequacy, governance and technology expectations, favouring well-capitalised groups with cross-border risk management capacity. Kenya’s banking sector has undergone mergers that have reshaped the competitive landscape over the past decade, resulting in fewer but larger, more systemically important institutions.
Against this backdrop, Nedbank’s move signals a renewed South African push northwards, following a period in which domestic constraints and regulatory pressure limited outbound expansion.
Unlike earlier South African forays that relied on minority stakes or representative offices, the NCBA transaction offers immediate control, earnings exposure and a scalable digital lending engine.
It also provides a foundation for building a pan-regional payments platform spanning East and Southern Africa, positioning the combined group to compete more aggressively in digital commerce, merchant acquiring and cross-border settlement services.
