Absa Kenya shares jump 9% after parent unveils $240m stake increase

Shares of Absa Bank Kenya rose by 9.2 percent on Friday morning after parent company Absa Group announced plans to increase its stake in the lender to 85 percent from 68.5 percent in a deal valued at Ksh30.9 billion ($240 million).

The stock climbed to Ksh32.1 in early trading on the Nairobi Securities Exchange as investors welcomed the move, which includes a tender offer at Ksh34.50 per share—an 18.1 percent premium to the bank’s 30-day volume-weighted average price as of June 17, according to Nairobi-based financial services firm Mwango Capital.

The Johannesburg-based lender on Thursday launched a tender offer to acquire up to 895.99 million shares from minority shareholders, underscoring its confidence in the long-term prospects of its Kenyan subsidiary and the broader East African banking market.

The transaction, one of the largest recent banking deals in East Africa, comes amid intensifying competition among South African lenders seeking growth outside their relatively mature domestic market.

Absa’s move follows closely on the heels of Nedbank Group’s proposed $856 million acquisition of a controlling stake in NCBA Group, highlighting a growing scramble among South Africa’s banking giants for a bigger share of East Africa’s fast-growing financial sector.

Kenya, East Africa’s largest economy, has increasingly emerged as a strategic market for regional lenders, driven by rising financial inclusion, rapid digital adoption and a growing middle class.

By increasing its stake, Absa is tightening its control over one of East Africa’s most profitable banking franchises while positioning itself for future growth in digital banking, lending and regional trade.

The tender offer is expected to open on June 30 and close on August 11, subject to approvals from Kenya’s Capital Markets Authority and exemptions from mandatory takeover rules.

Absa said it intends to maintain Absa Bank Kenya’s listing on the Nairobi Securities Exchange, allowing minority investors to continue participating in the lender’s future growth.

The parent company’s increased commitment comes as Absa Kenya continues to deliver strong financial performance.

The bank reported a 10 percent increase in net profit to Ksh22.9 billion ($178 million) last year, supported by robust growth in non-interest income from digital payments, fees and commissions, asset management and bancassurance.

Revenue rose to Ksh61.4 billion ($477 million), while return on equity stood at 22.8 percent.

The strong earnings momentum has continued into 2026. In the first quarter, Absa Kenya posted profit after tax of Ksh5.3 billion ($41 million), while total revenue reached Ksh14.7 billion ($114 million).

The lender maintained a capital adequacy ratio of 21 percent and liquidity reserves of 53.2 percent, underscoring its strong balance sheet and financial resilience.