Fitch Ratings has placed NCBA Group Plc and NCBA Bank Kenya Plc on Rating Watch Positive following a significant development: South Africa’s Nedbank Group has extended an offer to acquire a majority stake in the Kenyan lender. This strategic move, announced on February 9, 2026, involves Nedbank proposing to acquire 66% of NCBA. Shareholders holding a substantial 71.2% of NCBA’s issued shares have already provided irrevocable undertakings to accept Nedbank’s offer for their pro-rata entitlements, signaling strong internal support for the transaction. The acquisition, however, remains contingent on securing necessary regulatory approvals, including an exemption from Kenya’s Capital Markets Authority.

The decision by Fitch to place NCBA Group’s long-term issuer default rating of B- and its national long-term rating of AA(ken), along with the identical ratings for NCBA Bank, on Rating Watch Positive, stems from the credit rating agency’s assessment of the potential benefits for NCBA. Fitch views that, upon completion of the deal, NCBA would likely benefit from a high degree of support from Nedbank, which itself holds a BB- rating with a stable outlook. This perspective underscores NCBA’s strategic importance to Nedbank’s broader expansion objectives within the East African region. Other existing ratings for NCBA remain unaffected by this current watch.

The implications of this potential acquisition extend to reshaping credit profiles within the African banking sector. Fitch has indicated that NCBA’s ratings could see an upgrade once Nedbank assumes its role as the controlling shareholder. This prospective enhancement would reflect the anticipated support from Nedbank rather than NCBA’s inherent standalone financial strength. Under Fitch’s established framework, NCBA’s existing government support ratings would be withdrawn and subsequently replaced with new shareholder support ratings directly linked to Nedbank. Any international scale upgrade would likely be capped at one notch, while national ratings could potentially rise by up to two notches.

Furthermore, this transaction highlights Nedbank’s strategic intent to expand its footprint beyond Southern Africa, effectively leveraging Kenya as a crucial regional hub. For NCBA, the successful completion of the deal promises several advantages, including improved access to funding and an boost in market confidence, even before any operational synergies fully materialize. Investors are now closely monitoring the progress of regulatory clearance and the overall timeline for the acquisition. Fitch has stated its expectation to resolve the rating watch once the acquisition is finalized. Should the deal encounter any roadblocks and ultimately not proceed, NCBA’s ratings would be affirmed at their current levels, redirecting focus back to the bank’s standalone risk profile. Delays in completing the acquisition beyond a six-month period could lead to an extension of the rating watch.