Standard Bank Group Ltd.’s Kenyan unit, Stanbic Holdings Plc, is in confidential talks to acquire NCBA Group Plc, a move that could create Kenya’s third-largest lender by assets, valued at nearly KSh1.1 trillion (US$8.5 billion).
According to Bloomberg, Stanbic, which is 75% owned by Standard Bank, has approached NCBA regarding a potential merger. If successful, the combined entity would trail only Equity Group Holdings Plc and KCB Group Plc in asset size, signalling a major shift in Kenya’s competitive banking sector.
NCBA’s market performance
NCBA closed its Tuesday trading day at 75.25 KES per share on the Nairobi Securities Exchange (NSE), recording an 8.3% gain over its previous closing price of 69.50 KES.
NCBA Group posted a solid H1 2025 performance, with double-digit earnings growth and improved asset quality, even as its loan book and total assets contracted. The lender continues to demonstrate resilience through interest income strength, disciplined cost management, and capital adequacy.
Earnings Momentum
- Profit After Tax rose by 12.6% to KSh11.0 billion
- Core EPS increased to KSh6.7, up from KSh6.0
- Net Interest Income surged 26.7% to KSh20.8 billion
- Dividend Per Share declared at KSh2.50 (up 11.1%)
- Net Interest Margin improved to 6.7% from 5.8%
- Return on Equity stood at 21.0%; Return on Assets at 3.4%
Asset Quality and Risk Management
- Gross NPL Ratio improved to 12.18%, down from 12.24%
- Loan Loss Provisions increased 19.1% to KSh3.2 billion
- NPL Coverage Ratio rose to 65.5%, reflecting stronger provisioning
- Cost of Risk edged up to 9.1%
Balance Sheet Contraction
- Total Assets declined by 3.8% to KSh663.0 billion
- Loan Book contracted by 7.0% to KSh288.1 billion
- Customer Deposits fell by 6.0% to KSh497.0 billion
- Shareholders’ Funds rose 16.8% to KSh118.5 billion
Valuation Snapshot
- Target Price: KSh72.30 (16% upside from KSh64.30 as of August 29, 2025)
- P/E Ratio: 4.6x vs industry average of 4.5x
- P/TBV Ratio: 1.0x vs industry average of 1.3x
- Annualised Dividend Yield: 3.9%
NCBA’s H1 2025 results reinforce its positioning as a stable, dividend-paying bank with strong fundamentals and prudent risk management.
Stanbic Holdings Doubles Dividend Despite Profit Decline in H1 2025
Regulatory Winds Favour Consolidation
Kenya’s banking regulator has long encouraged consolidation to reduce fragmentation in a market with over 40 licensed lenders.
A Stanbic–NCBA merger would align with this push, potentially improving capital adequacy, operational efficiency, and regional competitiveness.
