South African Banks Race Into Kenya as FirstRand Waits
KENYA · BANKING
Key Facts
- —What is happening South Africa’s biggest banks are buying their way into Kenya, East Africa’s financial hub.
- —Who already moved Nedbank is taking 66% of NCBA for 13.9 billion rand, about US$855 million.
- —Who tried and fell short Absa raised its Kenyan stake to 71.99% in a tender that had aimed for 85%.
- —Who is still waiting FirstRand, South Africa’s second most valuable bank, wants in and will not pay a premium.
- —In its CEO’s words What we will not do is overpay for any asset.
- —Why it matters to you More competition for retail and business customers in Kenya, including foreigners.
Three of South Africa’s four big banks have decided that Kenya is where the next customers are. The fourth is waiting for a seller who will accept its price.
Kenya has become the acquisition target of choice for South African banking. Two deals have closed this year, and the largest suitor has not found its price.
Nedbank Got There First
Kenya’s central bank approved Nedbank’s purchase of a controlling 66% stake in NCBA on 31 August.
The price is 13.9 billion rand, about US$855 million. Holders of roughly 77.54% of NCBA gave irrevocable undertakings.
NCBA stays listed in Nairobi with a 34% free float. The remaining approvals were expected by the end of September.
NCBA claims about 60 million customers across Kenya, Tanzania, Uganda and Rwanda. It also runs digital operations in Ghana and Ivory Coast.
That number needs reading correctly. It is driven overwhelmingly by mobile lending accounts rather than by branch banking customers.
Absa Aimed Higher Than It Landed
Absa Group lifted its stake in Absa Bank Kenya to 71.99% in August through a tender offer.
It had offered for up to 896 million shares and was targeting 85%. It took up 189 million shares from 2,045 shareholders.
The value was around US$239 million. Absa says it will not return to the market under this offer.
Charles Russon, who runs Absa’s Africa regions, put a positive reading on the shortfall. Shareholders retaining their investment, he said, is a signal of confidence in Absa Kenya.
FirstRand Is the One Still Looking
FirstRand has representative offices in Kenya and Ghana, corporate banking in Nigeria, and full operations in seven African countries. Kenya is the gap.
Chief executive Mary Vilakazi has been explicit about the terms. There must be a willing seller at the right price for us to do any deal, she said.
What we will not do, she added, is overpay for any asset.
FirstRand is worth about 540 billion rand, roughly US$33 billion. It became the first South African bank above 500 billion rand in January.
Standard Bank was also in talks for NCBA in October 2025. It lost out to Nedbank.
The Number That Explains FirstRand’s Caution
FirstRand reported full-year results on 10 September, for the year to 30 June. Headline earnings fell 5% to 39.7 billion rand, about US$2.44 billion.
The fall has one cause, and it is British rather than African. The group took a pre-tax provision of £518.4 million, about US$700 million, for motor finance redress in the United Kingdom.
Including the scheme extension, the gross undiscounted provision reaches £807 million, roughly US$1.09 billion.
Strip that out and normalised earnings rose 10%, with a return on equity of 21.5%. The dividend went up 16%.
A bank writing a billion-dollar cheque in London is a bank counting carefully in Nairobi.
Why Kenya
Kenya has the deepest financial system in East Africa and the region’s most developed mobile money infrastructure.
It is also a base from which to reach Tanzania, Uganda, Rwanda and the wider region without starting again in each country.
South African banks have run out of growth at home. The domestic market is mature, heavily banked and growing slowly.
For a foreigner banking in Kenya, more owners competing for the same customers usually means better products. It should also mean fewer barriers to opening an account.
It also means consolidation. Three of the four biggest South African banks are now buying into a market that had been dominated by Kenyan-owned lenders.
More: Africa news and analysis, every day from The Rio Times.
Frequently Asked Questions
Which South African banks are expanding into Kenya?
Nedbank has bought control of NCBA, Absa has raised its stake in Absa Bank Kenya, and FirstRand is looking for a deal.
What did Nedbank pay?
13.9 billion rand, about US$855 million, for a 66% stake in NCBA, approved on 31 August 2026.
What stake does Absa hold?
71.99% of Absa Bank Kenya, after a tender that had targeted 85%.
What has FirstRand said?
Chief executive Mary Vilakazi says there must be a willing seller at the right price, and that the group will not overpay.
Why did FirstRand earnings fall?
A UK motor finance redress provision of £518.4 million, about US$700 million. Normalised earnings rose 10%.
Why is Kenya attractive?
It has East Africa’s deepest financial system and the most developed mobile money infrastructure.
Sources: Business Day (Johannesburg), BusinessDay (Lagos), Reuters, CNBC Africa, Central Bank of Kenya.
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error
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