Not much more than a year into his term as Nedbank CEO Jason Quinn decided to refocus the bank’s non-South African footprint from West to East Africa. It never had control of the West African-based Ecobank, which was Nedbank’s primary investment in the rest of Africa. South Africans have always felt more comfortable in East Africa, which has a lot more cultural similarities, whether it’s the climate, cricket or game viewing.
In Kenya they even drive on the left-hand side of the road, while Nigeria and Ghana drive on the right, even though they are part of the (British) Commonwealth. Charles Russon, who runs Absa’s rest-of-Africa portfolio — which for decades operated as Barclays Africa — says from a risk-adjusted perspective East Africa has delivered consistently higher and more stable economic growth than some other markets, including many West African countries, with generally lower inflation and currency volatility. This creates a more predictable environment for deploying capital and building up banking operations.
It takes many years to establish a banking franchise in an emerging market, so Nedbank has decided to get into the market buying a controlling 66% stake in NCBA Group for R13.9bn — more than chump change considering that Nedbank is the smallest bank in South Africa by market capitalisation at R127bn. The 34% free float will be available to Africa and Frontier fund investors through the Nairobi Securities Exchange (NSE). While the record of South African clothing retailers investing into Europe and Australia has been poor, SA banks have a decent track record regarding investing in Africa.
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Just look at Standard Bank. The return on equity in its Africa regions is substantially better than in Mzansi. Nedbank’s bid for NCBAis nothing like as controversial as Mr Price’s bid for NKD in Germany, for example, and it looks logical.
Nedbank is just about a perfect South Africa Inc share, with almost all its income coming from SA and its neighbours. It needs to diversify to grow and to become more attractive to investors. Quinn says NCBA offers a strong brand presence, an extensive regional network, advanced digital capabilities and deep customer reach.
He argues that this aligns with Nedbank’s established corporate and investment banking expertise, cross‑border structuring capabilities and strong balance sheet. Quinn says East Africa is underpinned by strong macroeconomic fundamentals; the size of its economy; a large and growing population; attractive growth prospects; and the primary trade corridor that links Africa with the Middle East, India and Asia. The British bank Standard Chartered (which until 1987 was the parent of SA’s Standard Bank) has closed its retail banks in several African countries but remains committed to Kenya.
It says Kenya is one of the continents fastest growing, most diversified economies, with growth projected at about 4.9% in 2025–27, above Africa’s average. Standard Chartered has operated in Africa for 170 years. Its group chair is former Absa CEO Maria Ramos. Read:EDITORIAL: East Africa beckons as lessons temper a big banking gamble Standard Chartered says that with a young, rapidly rising population, and its pivotal role as the business and financial hub for East Africa, Kenya has long-term potential, even as the country manages challenges such as high public debt and tighter financing conditions.
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