Until now, Nedbank's presence in East Africa has been a single representative office. That changes in early November, when it takes control of NCBA, the Kenyan group that Moneyweb calls Africa's largest bank by number of customers. Nedbank told the market on Monday that its offer had become unconditional on 15 October, which means every regulatory approval and condition attached to it has been met or waived.
What happens between now and 3 November
Settlement starts today. Over the following weeks, NCBA shareholders who accepted the offer receive a mix of cash and newly issued Nedbank shares, so many of them will end up owning a piece of a South African bank. Moneyweb puts the cash part at around R3 billion of a R13.9 billion deal, with the rest paid in shares.
The deal is expected to close on or about 3 November, leaving Nedbank with about 66% of NCBA. It will publish the final cash and share numbers around 5 November and starts counting NCBA in its own results in the last quarter of this year. NCBA keeps its Nairobi listing, its own board, its brand and its local management, and because Nedbank only had a representative office in the region, there are no branches to merge.
A bank with nine-tenths of its assets at home
Nedbank needs the diversification more than some of its rivals. Its earlier route into the rest of Africa was a stake of about a fifth in West Africa's Ecobank, and Daily Investor reports that 91% of its assets sit in South Africa. Absa, by comparison, operates in 11 countries outside South Africa, and Standard Bank in 21 African markets.
NCBA brings more than 60 million customers through more than a hundred branches in Kenya, Uganda, Tanzania and Rwanda, plus digital operations in Ghana and Ivory Coast. In its half-year presentation to analysts, Nedbank said NCBA would contribute 11% of group earnings as a full subsidiary, which would lift the share it earns outside South Africa to about a seventh. Finance chief Mike Davis told Daily Investor he would like that to reach 20%.
Chief executive Jason Quinn calls it "a decisive step forward in our African growth strategy". Kenya, the region's largest economy, is meant to be the base for whatever comes next.
