NCBA Group’s digital credit and banking services coupled with its progressive dividend payout were the key factors that saw South Africa’s Nedbank offer a relatively higher premium to acquire a 66 percent stake in the Nairobi Securities Exchange-listed lender.
Nedbank indicated on January 22 that it will pay Sh110.4 billion in cash and stock for the controlling stake in NCBA, translating to 1.4 times the net assets or book value of the Kenyan banking multinational.
The portion of net assets being acquired by Nedbank stood at Sh79.35 billion, based on NCBA’s results for the nine months ended September 2025.
The 1.4 times book value multiple places the valuation of NCBA above that of recent peer transactions.
Nigeria’s Access Bank acquired National Bank of Kenya in 2024 at 1.25 times net assets while a consortium of three companies acquired a 39 percent stake in Sidian Bank at a price that appraised the lender at 0.95 times its book value.
Equity Group in June 2023 acquired a controlling 92 percent stake in Rwanda’s Cogebanque at a 1.26 times its net assets. Kenyan banks previously traded at up to three times their net assets in early 2015, with their valuation taking a hit from multiple shocks including the Covid-19 pandemic and interest rates caps which lasted from September 2016 to November 2019.
“NCBA has amazing technology. If you look at what NCBA has been doing in the digital and fintech arena, it has technologies that we think are incredibly powerful and something that we can use even in our own home market in South Africa and also in other markets because there’s something there that is clearly scalable," Nedbank’s CEO, Jason Quinn, told the Business Daily.
"When you see technologies that are scalable, price-to-book multiple isn’t always the best determinant of value because you can scale and build out those technologies in other markets."
Nedbank says that NCBA's track record in dividend payment was another key factor that informed its willingness to accept a relatively high premium in acquiring a controlling stake in the business.
In the financial year 2024, NCBA’s dividend stood at Sh5.5 per share translating to a total payout of Sh9 billion which was a 15.8 percent increase compared to the previous year and a payout ratio of 41.4 percent. Between 2020 and 2024, NCBA's total dividend payout stood at Sh31 billion.
Nedbank says that the NCBA acquisition is designed to give a more stable and stronger dividend payout than the bank experienced with Ecobank which it exited in 2025.
“It’s also fair to say that NCBA Group is a strong dividend payer and so the earnings correlate quite nicely with the cash flows and that was another compelling component of the valuation especially given that the business is well capitalized," Quinn says.
"Although we had long standing shareholding in Ecobank, West Africa is a little bit more difficult to extract returns out of and the track record of dividend coming out of Ecobank particularly in Nigeria was problematic."
Nedbank’s CEO is visiting Kenya this week to meet the top leadership of NCBA Group as well as market regulators including the Capital Markets Authority and the Central Bank of Kenya.
The bank’s acquisition of NCBA is expected to be concluded within 6 to 9 months, implying it should be consummated by the start of the third quarter of 2026.
