NCBA to give Sh6b dividend as profit up 12pc

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NCBA Group has announced a Sh6.18 billion interim dividend payout even as South Africa's Nedbank Group awaits regulatory clearance to complete its proposed majority takeover.

The tier-one lender declared an interim dividend of Sh3.75 per share on Wednesday, up from Sh2.50 in the prior year, after reporting a 12.2 per cent jump in half-year profit after tax to Sh12.4 billion.

The dividend will be payable to shareholders on the register as at August 28, 2026, with payment on or immediately after September 8.

"The first half of 2026 was marked by a dynamic operating environment with pressure on inflation and a cautious policy approach by the regional Central Banks," NCBA Group Managing Director John Gachora said.

"Our focused execution of the UBUNTU strategy has ensured that we delivered a resilient total income growth of 15.1 per cent reflecting healthy business volumes, improved margins and continued customer activity."

The group invested Sh2.4 billion in technology infrastructure to accelerate AI adoption and strengthen cyber resilience.

Return on average equity stood at 19.0 per cent, while capital adequacy remained strong at 21.7 per cent, well above the regulatory minimum.

With the Nedbank transaction still subject to regulatory approvals and expected to close later in the year, the current shareholders, not Nedbank, remain the primary beneficiaries of the bumper payout.

The Philip Ndegwa family, through First Chartered Securities Ltd, is NCBA's largest shareholder with a 14.94 per cent stake, equivalent to 246.1 million shares.

Based on the Sh3.75 per share dividend, the family is set to receive approximately Sh922.9 million from the interim payout.

The Kenyatta family, through Enke Investments Ltd, holds 217.4 million shares, representing a 13.2 per cent stake. Their share of the dividend will be approximately Sh815.3 million.

The tender offer by Nedbank Group to acquire approximately 66 per cent of NCBA's issued ordinary shares closed on July 10, 2026, attracting valid acceptances in respect of 79.9 per cent of issued share capital.

However, the transaction remains subject to regulatory approvals and is expected to be completed later in the year.

NCBA will remain listed on the Nairobi Securities Exchange following implementation, with the remaining 34 per cent of shares continuing to trade publicly.

The lender's profit after tax was driven by a 15.1 per cent increase in operating income to Sh40.7 billion and a 26.9 per cent surge in digital loans disbursed to Sh819 billion.

Total assets expanded 11.5 per cent to Sh739 billion, while customer deposits grew 11 per cent to Sh551 billion.

Following final reconciliation and scaling, Nedbank is expected to hold approximately 66 per cent of NCBA's issued share capital, with the remaining 34 per cent continuing to be held by existing shareholders.

Regulatory approvals have been obtained from the Prudential Authority and Financial Surveillance Department of the South African Reserve Bank, the Capital Markets Authority of Kenya, the National Bank of Rwanda, Bank of Tanzania, COMESA Competition and Consumer Commission, East African Community Competition Authority, Tanzanian Fair Competition Commission and ECOWAS Regional Competition Authority.

The Kenya banking subsidiary remained the Group's key profit driver, growing profitability by 24.3 per cent year-on-year to Sh13.7 billion.

Regional subsidiaries in Uganda, Tanzania and Rwanda delivered a combined Sh1.6 billion in profitability on the back of strong lending growth of 25 per cent.

Non-banking subsidiaries, including NCBA Investment Bank, Leasing, Bancassurance and NCBA Insurance – delivered Sh1.1 billion collectively, a 40 per cent year-on-year growth.

"While the global macroeconomic environment signals uncertainty leading to a softer growth projection of 3.1 per cent for 2026, the investor landscape remains vibrant with major regional expansion transaction deals expected to close in the second half of the year," Gachora said.

"We remain confident in the strength of our Ubuntu strategy enabled by a projected optimistic business outlook and our ability to unlock new growth opportunities which will generate enduring value for customers, shareholders, and the communities we serve."