NEWS: Nedbank Expands into East Africa with Major Banking Deal
Banking News
Nedbank has officially completed its purchase of a 66% shareholding in NCBA Group, a major East African banking business.
The deal gives Nedbank access to around 60 million potential new customers across Kenya, Uganda, Rwanda and Tanzania. This marks Nedbank’s first major expansion into East Africa. Until now, the bank has relied heavily on South Africa, where economic growth has recently been relatively slow. By expanding into countries with faster growing economies, Nedbank hopes to increase its income and reduce its dependence on the South African market.
The acquisition follows Nedbank’s earlier investment in West African banking group Ecobank, which so far has not delivered the growth the bank had hoped for. This time, Nedbank will have greater control because NCBA will operate as its subsidiary (a company owned and controlled by another company). NCBA will keep its existing brand and local management. Nedbank expects the business will contribute around 11% of its earnings, with a longer term goal of generating 20% of its income from outside South Africa. The bank plans to focus initially on financing infrastructure projects and helping businesses expand across East Africa.
