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South Africa’s Standard Bank Group Ltd has reportedly opened talks to acquire Kenya’s NCBA Group in what could be the largest acquisition of a Kenyan bank.
According to a report that was published by Bloomberg, the South African lender has instructed its Kenyan subsidiary Stanbic Bank to open talks that could lead to the acquisition of the NCBA Group.
The acquisition, if successful, could create the third largest bank in Kenya after KCB Group and Equity Group. The Standard Bank Group is currently the largest bank in Africa by assets and holds a 75 percent stake in Kenya’s Stanbic Holdings PLC.
Following the news of the potential takeover, NCBA skyrocketed at the Nairobi Securities Exchange (NSE). The counter touched a day’s high of Sh76.25 per share from a day’s low of Sh72 per share.
It closed the day’s trading session at an average of Sh75.25 which represented a gain of 8.27 percent from the previous day’s closing average trading price of Sh69.50 per share.
Nonetheless, NCBA Group and Stanbic Holdings did not openly speak on the reported pitch, which Bloomberg attributed to internal sources with knowledge on the matter. The acquisition pitch by Standard Bank Group comes six years after NIC Bank and CBA Bank merged to form NCBA Group.
This merger had resulted in more than doubling of net earnings in 2019 to Sh7.84 billion. Market share increased to 10.1 percent. Prior to the merger, NIC Bank had been holding a 4.17 percent market share while CBA Bank held a 5.12 percent stake.
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The two banks were widely associated the Kenyata and Ndegwa families. The Kenyatta family controlled a 24.9 percent stake in CBA through their family investment vehicle which is known as Enke Investments Limited. On the other hand, the Ndegwa family controlled a 15.84 percent in NIC Bank through First Chartered Securities.
