Standard Bank Group, Africa’s largest bank by assets, is in discussions to acquire Kenya’s NCBA Group through its local subsidiary Stanbic Holdings, according to a Bloomberg report published today. The potential transaction would create a banking powerhouse with approximately KES 1.1 trillion ($8.5 billion) in combined assets, positioning it as Kenya’s third-largest lender behind only Equity Group Holdings and KCB Group.
The talks between Johannesburg-based Standard Bank’s 75%-owned Kenyan unit and NCBA have received internal approvals, sources familiar with the matter told Bloomberg. While negotiations are ongoing, there’s no guarantee a deal will be finalized, though both parties are reportedly aiming to conclude a transaction within the coming months.
Market Reaction Signals Investor Confidence
NCBA’s stock surged dramatically on the acquisition news, jumping 9.7% to reach a record high of KES 76.25 by 10:27 AM in Nairobi. The shares have now gained an impressive 73% over the past 12 months, reflecting growing investor confidence in the bank’s prospects.
The combined market reaction underscores the strategic value investors see in the potential merger. NCBA is currently valued at approximately KES 125 billion, while the merged entity would command assets close to KES 1.1 trillion.
Strategic Shift for Standard Bank
The potential acquisition represents a notable strategic pivot for Standard Bank, which has historically emphasized organic growth in East Africa rather than acquisitive expansion. However, the move aligns with the bank’s broader strategy to strengthen its regional footprint as African markets present greater growth opportunities compared to its more saturated home market.
Standard Bank’s East Africa Regional Chief Executive Patrick Mweheire had previously indicated in 2023 that the bank planned to acquire a Kenyan lender by 2025 as part of its growth strategy. The NCBA talks appear to be the materialization of these earlier plans.
Regulatory Environment Driving Consolidation
The timing of these discussions coincides with Kenya’s push for banking sector consolidation. The Central Bank of Kenya has been encouraging mergers to create more resilient institutions with stronger capital bases. New capital requirements enacted in December 2024 under the Business Laws Amendment Act mandate that banks maintain KES 10 billion in capital by 2026.
Currently, 12 of Kenya’s 39 licensed banks face a combined capital shortfall of KES 11.8 billion, creating pressure for smaller institutions to either recapitalize or merge with larger players. This regulatory environment has created an opportune moment for well-capitalized institutions like Standard Bank to pursue strategic acquisitions.
Regulatory Approval Process
The proposed transaction would require approvals from multiple regulatory bodies in both Kenya and South Africa. The Central Bank of Kenya would conduct fit-and-proper checks and prudential compliance reviews, while the Competition Authority would examine market concentration effects. Given NCBA’s listing on the Nairobi Securities Exchange, the Capital Markets Authority would also need to oversee takeover procedures.
NCBA was formed in 2019 through the merger of NIC Group and Commercial Bank of Africa, the latter having historical ties to Kenya’s influential Kenyatta family. The bank has since established itself as a significant player in Kenya’s financial sector, particularly in asset finance where it holds a 36% market share.
