SA’s Absa deepens Kenya bet with $240m stake increase amid regional banking race

South Africa’s Absa Group is set to invest Ksh30.9 billion ($240 million) to increase its stake in Absa Bank Kenya to 85 percent from 68.5 percent, marking the latest sign of intensifying competition among regional lenders seeking growth in East Africa.

In an email statement on Thursday, the Johannesburg-based banking group noted that it launched a tender offer to acquire up to 895.99 million shares from minority investors at Ksh34.50 per share, representing an 18.1 percent premium to the bank’s 30-day volume-weighted average price as of June 17.

The transaction marks one of the biggest recent cross-border banking deals in East Africa and comes five months after South Africa’s Nedbank Group unveiled plans to acquire a controlling stake in NCBA Group in a deal valued at $856 million.

Together, the transactions underscore a growing push by South African lenders to expand beyond their relatively mature home market into faster-growing African economies.

Kenya, East Africa’s largest economy, has increasingly become a key battleground for the continent’s banking heavyweights, driven by rising digital adoption, expanding financial inclusion and a growing middle class.

By increasing its stake, the top South African banking group is tightening its grip on one of East Africa’s most profitable banking franchises while positioning 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, 2026, subject to approvals from Kenya’s Capital Markets Authority and exemptions from mandatory takeover rules.

Absa said it intends to maintain the bank’s listing on the Nairobi Securities Exchange, signalling continued participation by local investors.

Currently, the lender holds 68.5 percent of Absa Bank Kenya, while approximately 66,742 shareholders own about 21.3 percent of the lender, equivalent to more than 1.15 billion shares.

The parent company’s increased commitment comes as Absa Kenya continues to post strong earnings growth. It reported a 10 percent increase in net profit to Ksh22.9 billion ($178 million) in 2025, supported by strong growth in non-interest income from digital payments, fees and commissions, asset management and bancassurance activities.

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

The strong momentum has continued into 2026. In the first quarter, Absa Kenya posted profit after tax of Ksh5.3 billion ($41 million), with return on equity at 20.3 percent.

Total revenue reached Ksh14.7 billion ($114 million), driven by net interest income of Ksh10.4 billion and non-interest income of Ksh4.3 billion. Income from subsidiaries rose 25 percent year-on-year, supported by diversification and disciplined cost management.

The bank maintained a capital adequacy ratio of 21 percent and liquidity reserves of 53.2 percent, underscoring its financial resilience.

As competition among Africa’s largest lenders intensifies, Kenya is rapidly emerging as one of the continent’s most strategic banking markets.