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Nairobi was buzzing this week when Nedbank Chief Executive Jason Quinn landed in town with one mission — defend a jaw-dropping deal.
The South African banking giant has tabled about $855 million (Shs3.01 trillion) for a 66 percent stake in NCBA Group, valuing one of East Africa’s biggest banks at roughly 1.4 times book value. In a market where recent deals have hovered closer to book value — or even below — this is no small gamble.
Banking insiders immediately asked: Why pay that premium?
Before news of the bid leaked, NCBA shares had been trading for much of late 2025 below Ksh85, sometimes drifting between Ksh78 and Ksh80 — levels hugging book value. Even after a rally to around Ksh88–90 this month, the stock was only about 1.2 times book.
With a book value per share of roughly Ksh72.91, Nedbank’s offer implies a price near Ksh102 per share — a clear premium to where the market had priced the bank.
To put it in perspective, Access Bank’s acquisition of National Bank of Kenya was reported at about 1.25 times book. A consortium’s purchase of 39 percent of Sidian Bank came in at roughly 0.95 times. Equity Group’s takeover of Rwanda’s Cogebanque was priced near 1.26 times. Nedbank’s bid? Sitting at the top end.
But Quinn is unapologetic.
“Value is in the eye of the beholder,” he told NTV Kenya. “Control carries a premium.”
And control is exactly what he wants.
Nedbank recently agreed to sell its 21.2 percent stake in Ecobank Transnational for $100 million, admitting it was hard to influence strategy as a minority shareholder. “It’s quite hard to influence strategy with such a small stake,” Quinn said bluntly.
Lesson learned.
This time, Nedbank is going big — 66 percent big — to ensure it calls the shots.
NCBA Chief Executive John Gachora doesn’t think 1.4 times book is excessive. “I wouldn’t say it’s high,” he fired back. “I would say that we are a premium institution.”
The structure of the deal is just as bold as the price tag. It is split 20 percent cash and 80 percent new Nedbank shares listed on the Johannesburg Stock Exchange, while the remaining 34 percent of NCBA will continue trading on the Nairobi Securities Exchange.
That means NCBA shareholders get exposure to a highly liquid South African stock while still keeping a Kenyan listing. Minority investors who would receive fewer than 200 Nedbank shares — roughly equivalent to 5,000 NCBA shares — will be paid in cash to avoid the headache of opening South African brokerage accounts.
But here’s the real jackpot — digital money.
NCBA is not your traditional brick-and-mortar lender. In 2024 alone, it disbursed Ksh1 trillion in digital loans, up 23 percent year-on-year, serving more than 60 million customers across platforms like Fuliza and M-Shwari. Few Kenyan banks originate small-ticket digital loans at that scale.
“When you see technologies that are scalable, price-to-book is not always the best determinant of value,” Quinn argued.
Translation? Nedbank believes NCBA’s tech engine is worth the premium.
If those digital capabilities can be replicated beyond Kenya — into South Africa and other markets — today’s book value could look like a bargain tomorrow.
The marriage is being sold as complementary. Gachora describes it as a two-way street: NCBA brings digital firepower, while Nedbank adds muscle in corporate and investment banking, property finance, and asset finance — areas where South Africa is more mature.
Then there’s the dividend story.
For 2024, NCBA paid Ksh5.5 per share, up 15.8 percent year-on-year. That amounted to about Ksh9 billion from profit after tax of Ksh21.9 billion. At pre-deal prices of Ksh85–90, that translated into a dividend yield between 6 and 6.5 percent — competitive among tier-one Kenyan banks.
That steady payout strengthens Quinn’s pitch that he is not just buying growth — he is buying dependable cash flow.
A dividend parity clause in the deal ensures no shareholder double-dips or loses out during the transaction window.
Timing is also key.
Kenya’s banking sector is heading into consolidation after the Business Laws (Amendment) Act, 2024 raised minimum core capital requirements from Ksh1 billion to Ksh10 billion by 2029. Ratings agency Fitch Ratings has already warned tougher capital rules could accelerate mergers and acquisitions.
Nedbank is not waiting around.
Instead of tiptoeing into East Africa, it is buying instant scale in a market with strong demographics and a strategic trade corridor linking Africa to the Middle East and Asia.
Quinn believes global trade flows are “shifting east,” with India and China driving faster growth across Eastern and Southern Africa.
For NCBA, the deal answers a long-standing expansion question. Gachora says access to Nedbank’s capital pool will accelerate regional growth, including into Central Africa.
So why is Nedbank paying a premium?
Because it is not just buying a bank at 1.4 times book.
It is buying control. It is buying technology. It is buying dividends. It is buying timing.
And in the high-stakes game of African banking consolidation, sometimes the boldest bidder wins.
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