NCBA Group Receives Strategic Investment Proposal from Nedbank Group
Following the Central Bank of Kenya’s (CBK) Business Laws (Amendment) Act, 2024, that has mandated a ten-fold increase in minimum core capital for commercial banks in the country, talks of mergers and acquisition and even partnerships have started emerging. According to the law, commercial bank’s core capital has been raised from K Sh 1 billion (B) to K Sh 10 B by the end of 2029. This phased, five-year increase aims to boost financial stability, with interim targets set at K Sh 3 B billion by the end of 2025 and K Sh 5 B by 2026. By end of 2027, 2028 and 2029, the core capital figures will rise by K sh 6 B or 7 B; K sh 8 B & K sh 10 B respectively
This may not, however, be the reason and is not at all an insinuation following the NCBA Group PLC’s (NCBA or the Group), (a preeminent financial services provider in East Africa with a sound financial standing), announcement that it has received a Strategic Investment Proposal together with a Notice of Intention (NOI) from Nedbank Group Limited (Nedbank) to acquire approximately 66 per cent of the ordinary shares of NCBA from NCBA shareholders by way of a Tender Offer which if successfully completed, will enable Nedbank to acquire a controlling interest in NCBA. At the conclusion of the offer, NCBA will become a subsidiary of Nedbank and the remaining shares, representing 34 per cent of the issued shares of NCBA will remain listed on the Nairobi Securities Exchange (NSE).
According to a report released in Nairobi on January 21st, 2026, the planned acquisition values NCBA at a multiple of 1.4 times its Book Value. The proposed transaction structure will see NCBA shareholders who participate in the Tender Offer receive 20 per cent of their consideration in cash, while the remaining 80 per cent will be settled through the issuance of Nedbank ordinary shares listed on the Johannesburg Stock Exchange (JSE).
Notably, NCBA maintains operations across Kenya, Uganda, Tanzania, Rwanda, Ivory Coast and Ghana, with 122 branches serving over 60 million customers. Meanwhile, Nedbank, headquartered in South Africa with a primary listing on the JSE and a secondary listing on the Namibia Securities Exchange, is among Africa’s largest financial institutions, with established footprints throughout Southern Africa and internationally (London, Dubai, Isle of Man, and Jersey).
According to the report, the proposed transaction is consistent with Nedbank’s stated strategy to extend its reach beyond Southern Africa, prioritizing the high-growth markets of East Africa. Kenya’s prominent role as a financial center, bolstered by robust institutions, advanced capital markets and a dynamic technology sector, provides a strategic foundation for Nedbank’s East Africa expansion.
NCBA’s strong market reputation, advanced digital banking services, asset finance leadership, investment banking expertise and regional network make the Group a key partner for Nedbank. Formed following the merger of NIC Group PLC and Commercial Bank of Africa Limited, NCBA now operates 122 East African branches, holds K Sh 665 B in assets, disburses over K Sh 1 trillion in digital loans annually, and averages an attractive ~19 per cent return on equity since its 2021 financial year.
Following the proposed acquisition, NCBA will become the cornerstone investment vehicle for Nedbank’s East African strategy while remaining NSE listed and its brand, customer and human capital decisions anchored locally. Currently, Nedbank only has a representative office in East Africa, and as such there will be no need for in-country integration of systems and operations.
The combined strengths of both organizations are expected to generate considerable synergies: Nedbank will strengthen NCBA’s Corporate and Investment Banking capabilities through its global presence, regional and sectoral expertise and capacity for cross-border collaboration, while access to an increased resource base will reinforce NCBA’s existing infrastructure and support the scaling of operations in Kenya and the broader East African region. As a subsidiary of Nedbank, NCBA staff will have access to training and career growth opportunities across multiple geographies, while customers will have access to a deep talent pool, capabilities and a large lending capacity.
Equally, Nedbank has expressed its intention to preserving NCBA’s brand, governance structures, operational model, and management team.
“Nedbank is an ideal partner for our growth in the East Africa region. This bank holds around 16 per cent to 17 per cent market share of loans and deposits in South Africa, leads in vehicle and commercial property finance with 36 per cent market shares each, and its overall ESG ratings are top 10 per cent amongst global peers,” appreciated John Gachora, NCBA Group MD at the announcement event. “This bank’s strong balance sheet will help us scale in our current markets as well as explore the investment propositions that the DRC and Ethiopia have to offer. We are proud of the brand we have built and look forward to making it central to Nedbank’s East Africa expansion,” affirmed Gachara.
On his part, Jason Quinn, the Chief Executive of Nedbank confirmed that Nedbank has a strategic objective to grow and diversify outside of its core Southern Africa market. “We’ve identified East Africa as a key growth region and we’re are therefore excited to partner with a strong and leading financial services firm such as NCBA to deliver on our growth ambitions,” he asserted.
“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 including in Rwanda, Tanzania and Uganda,” Jason added. He further appreciated the region’s stable operating environment, consistent macroeconomic performance, a young, growing urbanizing population, and a vibrant business community as factors that further reinforce East Africa’s attractiveness and growth potential.
With this investment, Nedbank and NCBA are poised to anchor Kenya as a gateway into the broader East African markets within which NCBA operates, and which represent a significant opportunity with a population of roughly 190 million people and GDP approaching K sh 38,700 billion (B) (USD300 B). Ethiopia presents a further opportunity given its population of approximately 136 million people and GDP of approximately K sh 17,417 billion (B) (USD135 B) while DRC presents an opportunity of 110 million people and a GDP of approximately k sh 9,030 B (USD 70 B).
However, the transaction is still subject to various regulatory approvals, including from the central banks in the relevant jurisdictions and is expected to close within six to nine months.
