{"id":852856,"date":"2026-03-04T16:00:00","date_gmt":"2026-03-04T14:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=852856"},"modified":"2026-03-04T15:49:41","modified_gmt":"2026-03-04T13:49:41","slug":"nedbank-buying-kenyan-bank-for-r13-9-billion-as-south-africa-falls-behind","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/852856\/nedbank-buying-kenyan-bank-for-r13-9-billion-as-south-africa-falls-behind\/","title":{"rendered":"Nedbank buying Kenyan Bank for R13.9 billion as South Africa falls behind"},"content":{"rendered":"\n

Nedbank is making progress with the acquisition of Kenya’s NCBA, drawn to the higher growth rates in East Africa.<\/p>\n\n\n\n

Nedbank recently announced its intention to acquire a 66% stake in NCBA in a deal valued at around R13.9 billion, with 80% of the deal funded through new Nedbank shares and 20% in cash.<\/p>\n\n\n\n

The remaining shares of NCBA will continue to trade on the Nairobi Stock Exchange. The deal will also see the existing NCBA management team remain in charge. <\/p>\n\n\n\n

Speaking with BusinessTech, Nedbank CFO Mike Davis said the chance to buy NCBA was a slight surprise, as Nedbank did not expect such a high-calibre bank to be on the table. <\/p>\n\n\n\n

NCBA is a tier-1 bank and manages KES 665 billion (around R85 billion) in assets. It has over 60 million customers and has over 100 branches. <\/p>\n\n\n\n

The bank was formed in 2019 through the merger of NIC Group PLC and Commercial Bank of Africa Limited, with operations in Kenya, Tanzania, Uganda, and Rwanda, and digital banking services in Ghana and the Ivory Coast. <\/p>\n\n\n\n

Davis said a strong selling point for NCBA was the far higher growth rates in East Africa, where markets are set to grow by 5% or more in 2026. <\/strong><\/p>\n\n\n\n

While South Africa is expected to see stronger growth in the short-to-medium term, the country is only expected to reach around 1.5% this year. <\/p>\n\n\n\n

Davis added that Nedbank will also bring its own expertise to NCBA, including its Corporate and Investment Banking (CIB) expertise in infrastructure finance. <\/p>\n\n\n\n

He added that the South African operations could also learn from the technological capabilities of NCBA. <\/p>\n\n\n\n

While NCBA will be part of a larger group, Davis said the NCBA management team will decide whether to expand into new territories. <\/p>\n\n\n\n

NCBA does business in West Africa through Ghana and the Ivory Coast, but Nedbank recently cut back in the region after selling its stake in Togo-based Ecobank Transnational Incorporated for $100 million. <\/p>\n\n\n\n

When it comes to further international mergers and acquisitions (M&As), Davis said that the bank is always on the hunt for good deals. <\/p>\n\n\n\n

That said, he said that it is not pursuing a deal to acquire Standard Chartered’s Botswana business following a report from Bloomberg last month. <\/a><\/p>\n\n\n\n

Nedbank financials <\/h2>\n\n\n
\n
\"\"<\/a>
Nedbank CFO Mike Davis<\/figcaption><\/figure><\/div>\n\n\n

Nedbank’s financial results for the 2025 financial year were heavily impacted by the sale of ETI, which led to a massive difference between headline earnings and basic earnings per share. <\/p>\n\n\n\n

The group\u2019s headline earnings per share increased by 2% to R17.2 billion, driven by an improved impairment charge, while revenue growth was slow.<\/p>\n\n\n\n

The group’s associate income declined in the second half of the year following the sale of ETI, and a R600 million settlement with Transnet amid transactions linked to state capture. <\/p>\n\n\n\n

Basic earnings per share, however, saw a far larger decline of 53% to 1,681 cents per share. <\/p>\n\n\n\n

Nedbank previously said that IFRS accounting standards required that the cumulative foreign exchange and fair value losses arising from the equity accounting treatment of its interest in ETI be recognised in profit or loss in 2025.<\/p>\n\n\n\n

This marks a change, as the accounting treatment for ETI was previously recognised in other comprehensive income.<\/p>\n\n\n\n

The recycling of the cumulative foreign exchange and fair value losses recognised via other comprehensive income (OCI) is excluded from headline earnings per share and diluted headline earnings per share.<\/p>\n\n\n\n

Despite the ETI sale hit, Nedbank said that balance sheet metrics were strong, enabling it to declare a final dividend of 1,104 cents per share.<\/p>\n\n\n\n

Notably, Nedbank’s Net Interest Income of 3% came despite a 6% increase in the group’s loan book. <\/p>\n\n\n\n

Davis said that this was due to margin dilution amid lower interest rates. There was also pricing pressure on good-quality deals, delays in corporate deals, and household demand only picking up in the second half. <\/p>\n\n\n\n

Metric<\/th>2025<\/th>2024<\/th>% Change<\/th><\/tr><\/thead>
Headline earnings (Rm)<\/td>17 200<\/td>16 934<\/td>+2%<\/td><\/tr>
Revenue (Rm)<\/td>73 924<\/td>71 721<\/td>+3%<\/td><\/tr>
Credit loss ratio (bps)<\/td>68<\/td>87<\/td>\u2013<\/td><\/tr>
Expenses (Rm)<\/td>43 395<\/td>40 577<\/td>+7%<\/td><\/tr>
Cost-to-income ratio (%)<\/td>57.8%<\/td>55.6%<\/td>\u2013<\/td><\/tr>
Diluted headline earnings per share (cents)<\/td>3 628<\/td>3 538<\/td>+3%<\/td><\/tr>
Headline earnings per share (cents)<\/td>3 706<\/td>3 631<\/td>+2%<\/td><\/tr>
Basic earnings per share (cents)<\/td>1 681<\/td>3 610<\/td>\u201353%<\/td><\/tr>
Final dividend per share (cents)<\/td>1 104<\/td>1 104<\/td>0%<\/td><\/tr>
Full-year dividend per share (cents)<\/td>2 132<\/td>2 075<\/td>+3%<\/td><\/tr>
Net asset value per share (cents)<\/td>24 956<\/td>24 039<\/td>+4%<\/td><\/tr>
Common-equity tier 1 ratio (%)<\/td>12.9%<\/td>13.3%<\/td>\u2013<\/td><\/tr><\/tbody><\/table><\/div><\/figure>\n\n\n\n
\n","protected":false},"excerpt":{"rendered":"

Nedbank is going big in a deal to buy NCBA, with the Big Four bank drawn to the higher growth rates in Kenya. <\/p>\n","protected":false},"author":95,"featured_media":852867,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872],"tags":[24570,1799],"class_list":["post-852856","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-ncba","tag-nedbank"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/852856","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/95"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=852856"}],"version-history":[{"count":2,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/852856\/revisions"}],"predecessor-version":[{"id":852875,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/852856\/revisions\/852875"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/852867"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=852856"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=852856"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=852856"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}