Nedbank Group set to enter Uganda, East Africa with acquisition of NCBA Bank

South Africa’s Nedbank Group is set to make a significant push into East Africa after unveiling plans to acquire a controlling stake in NCBA Group PLC, a move that will give the lender an immediate footprint in markets including Uganda.

NCBA said it has received a Strategic Investment Proposal and a Notice of Intention (NOI) from Nedbank Group Limited to acquire about 66 per cent of its ordinary shares through a Tender Offer to existing shareholders. If completed, the transaction will see NCBA become a subsidiary of Nedbank, while the remaining 34 per cent of its shares will continue to trade on the Nairobi Securities Exchange (NSE).

The proposed acquisition values NCBA at 1.4 times its book value. Shareholders who take up the Tender Offer will receive 20 per cent of the consideration in cash, with the balance settled through the issuance of Nedbank ordinary shares listed on the Johannesburg Stock Exchange (JSE).

Formed from the merger of NIC Group PLC and Commercial Bank of Africa Limited, NCBA operates 122 branches across Kenya, Uganda, Tanzania, Rwanda, Ivory Coast and Ghana. The Group serves more than 60 million customers, holds assets worth USD 5.1 billion, and disburses over USD 7.76 billion in digital loans annually. Since the 2021 financial year, NCBA has posted an average return on equity of 19 per cent.

With Nedbank’s entry, NCBA is also positioning itself for further expansion into the Democratic Republic of Congo and Ethiopia, markets viewed as offering strong growth potential.

Nedbank, one of Africa’s largest financial institutions, is headquartered in South Africa with a primary listing on the JSE and a secondary listing on the Namibia Securities Exchange. It also maintains an international presence in London, Dubai, the Isle of Man and Jersey. Its current footprint in East Africa is limited to a representative office, meaning no immediate operational integration is expected.

The two banks say the transaction will generate meaningful synergies. Nedbank is expected to strengthen NCBA’s corporate and investment banking capabilities through its global reach and sector expertise, while NCBA will gain access to a deeper capital base to support expansion across East Africa.

NCBA will retain its brand, governance structures, operational model and management team following the acquisition. Staff are expected to benefit from expanded training and career opportunities, while customers will gain from enhanced capabilities and increased lending capacity.

NCBA Group Managing Director John Gachora welcomed the deal, saying it would accelerate the bank’s regional growth strategy.

“Nedbank is an ideal partner for our growth in the East Africa region. 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,” Gachora said.

Nedbank Chief Executive Officer Jason Quinn said the acquisition aligns with the Group’s long-term strategy to diversify beyond Southern Africa.

“We identified East Africa as a key growth region, and we are excited to partner with a strong and leading financial services firm such as NCBA to deliver on our growth ambitions,” Quinn said.