Shares of Absa Bank Kenya experienced a significant rise of 9.2 percent on Friday morning after its parent company, Absa Group, unveiled plans to increase its ownership to 85 percent from the current 68.5 percent. This strategic move is valued at Ksh30.9 billion, equivalent to $240 million.
The stock climbed to Ksh32.1 in early trading on the Nairobi Securities Exchange, with investors reacting positively to the announcement. The deal includes a tender offer at Ksh34.50 per share, which represents an 18.1 percent premium over the bank’s 30-day volume-weighted average price as of June 17, according to financial services firm Mwango Capital.
Absa Group, headquartered in Johannesburg, launched a tender offer on Thursday to acquire up to 895.99 million shares from minority shareholders. This action signals strong confidence in the long-term prospects of its Kenyan subsidiary and the broader East African banking market.
This transaction is noted as one of the largest recent banking deals in East Africa. It occurs within a context of increasing competition among South African lenders who are actively seeking growth opportunities beyond their mature domestic market. Absa's move follows Nedbank Group's proposed $856 million acquisition of a controlling stake in NCBA Group, highlighting a growing trend among major South African banks to expand their presence in East Africa's rapidly developing financial sector.
Kenya, as East Africa’s largest economy, has become a crucial market for regional lenders. This is driven by advancements in financial inclusion, rapid adoption of digital technologies, and a growing middle class. By increasing its stake, Absa is strengthening its control over a highly profitable banking franchise in East Africa and positioning itself for future expansion in digital banking, lending, and regional trade.
The tender offer is scheduled to commence on June 30 and conclude on August 11, pending approvals from Kenya’s Capital Markets Authority and exemptions from mandatory takeover rules. Absa has stated its intention to maintain Absa Bank Kenya’s listing on the Nairobi Securities Exchange, allowing minority investors to continue participating in the bank's future growth.
Absa's increased commitment coincides with Absa Kenya's consistent strong financial performance. Last year, the bank reported a 10 percent increase in net profit, reaching Ksh22.9 billion ($178 million). This growth was supported by substantial increases in non-interest income derived from digital payments, fees, commissions, asset management, and bancassurance.
Revenue for the year rose to Ksh61.4 billion ($477 million), with a return on equity standing at 22.8 percent. The positive earnings momentum has carried into 2026. In the first quarter, Absa Kenya announced a profit after tax of Ksh5.3 billion ($41 million) and total revenue of Ksh14.7 billion ($114 million).
The lender maintained a robust financial position with a capital adequacy ratio of 21 percent and liquidity reserves of 53.2 percent, underscoring its strong balance sheet and financial resilience.
