South African bank wants to acquire 66% of NCBA Group, here's everything we know

South Africa’s Nedbank Group Limited has launched a major bid to anchor its presence in East Africa, issuing a strategic proposal to acquire a controlling 66 per cent stake in NCBA Group PLC. 

The proposal, announced Wednesday, marks a significant consolidation in the African banking sector, positioning the Nairobi-based lender as the primary vehicle for Nedbank’s expansion into the continent’s high-growth northern markets.

The proposed transaction, structured as a tender offer to NCBA shareholders, values the Kenyan banking group at 1.4 times its book value. 

Under the terms of the offer, participating shareholders would receive 20 per cent of the consideration in cash, with the remaining 80 per cent settled through the issuance of Nedbank ordinary shares listed on the Johannesburg Stock Exchange. 

If completed, NCBA will become a subsidiary of Nedbank, though it will remain listed on the Nairobi Securities Exchange with a 34 per cent free float.

Nedbank Chief Executive Jason Quinn characterised the move as a fulfilment of the bank’s strategic objective to diversify beyond its core Southern African market. 

Quinn identified Kenya as a "natural anchor" for the bank's regional ambitions, citing the country's sophisticated financial markets and dynamic technology sector. 

The partnership is expected to provide a gateway into a broader East African market that boasts a population of 190 million people and a combined GDP approaching $300 billion.

NCBA, formed from the high-profile merger of NIC Group and Commercial Bank of Africa, brings a formidable retail and digital footprint to the deal. 

The group currently operates 122 branches and maintains a dominant position in digital lending, disbursing over Sh1 trillion annually. 

NCBA Group Managing Director John Gachora noted that the capital and global expertise of Nedbank would help the lender scale its operations, particularly as it eyes expansion into massive emerging markets like Ethiopia and the Democratic Republic of Congo.

Despite the change in ownership, Nedbank has signalled a "hands-off" approach to the lender's local identity. 

The South African firm expressed its intention to preserve NCBA’s existing brand, management team, and governance structures. 

Because Nedbank currently only maintains a representative office in the region, executives noted there would be no immediate need for complex in-country integration of systems or operations.

The deal arrives at a time when East Africa’s macroeconomic performance and growing urban population continue to attract foreign capital. 

By leveraging NCBA’s infrastructure and Nedbank’s strong balance sheet, which includes a leading market share in South African vehicle and commercial property finance, the two entities aim to create a financial powerhouse capable of cross-border collaboration on a massive scale.

The transaction remains subject to regulatory approvals from central banks across multiple jurisdictions. Both parties expect the deal to close within the next six to nine months.