South Africa's banks are shopping again. Nedbank just dropped $856 million on Kenya's NCBA. Kenya's wealthiest families are about to get very, very liquid. Meanwhile, Buy Now Pay Later has doubled in South Africa.

THE BANKING BRIEF

Read time: 8 minutes

THE WIRE

• Nedbank bids $856 million for 66% of Kenya's NCBA in largest cross-border banking deal reshaping East Africa

• Buy Now, Pay Later usage doubled in South Africa during 2025 - 34% of consumers now request merchants add it

• South Africa's central bank governor says inflation on track to hit 3% target in 2026, a year ahead of forecast

1 BIG THING

Nedbank Bets $856 Million on Kenya's NCBA in Bold East African Play

South Africa's Nedbank offered to buy a 66% stake in Kenya's NCBA Group in a cash-and-stock deal worth R13.9 billion ($856 million), marking one of the largest cross-border banking acquisitions in East Africa. The deal values NCBA at 1.4 times book value and settles 20% in cash, 80% in newly issued Nedbank ordinary shares listed on the Johannesburg Stock Exchange (JSE). The remaining 34% of NCBA shares continue trading on the Nairobi Securities Exchange (NSE).

Why it matters:
South African banks spent years building domestic marketshare. Now they're hunting for growth in higher-margin East African markets where demographics, digital adoption, and trade corridors promise better returns than saturated home markets. For Kenya, this validates the country's position as East Africa's financial hub - even as Nigerian banks like Access and Zenith also eye the market.

State of Play:
NCBA was formed in 2019 through the merger of NIC Group and Commercial Bank of Africa. The bank now operates 122 branches across Kenya, Uganda, Tanzania, Rwanda, and Côte d'Ivoire, serving over 60 million customers with KSh 665 billion ($5.1 billion) in assets. The bank disburses over KSh 1 trillion ($7.7 billion) in digital loans annually.

Nedbank CEO Jason Quinn called the acquisition a "natural anchor" for the bank's ambitions in Rwanda, Tanzania, and Uganda. He cited Kenya's sophisticated markets, strong institutions, and vibrant technology sector. NCBA Managing Director John Gachora called Nedbank an "ideal partner," pointing to its balance sheet strength and market leadership as catalysts to help NCBA scale in existing markets and explore opportunities in the Democratic Republic of Congo (DRC) and Ethiopia.

Catch Up:
The deal structure protects continuity. If completed, NCBA becomes a Nedbank subsidiary but retains its brand, governance structures, operational model, and management team. Small investors get better pricing under the tender offer—KSh 105 ($0.81) per share for the 66% stake on offer—while high-net-worth investors receive a combined price of KSh 98.72 ($0.76) per share through the composite cash-and-stock structure.

Why should I Care?
If approved, this sets a precedent for more South African-East African banking consolidation - Standard Bank already operates across the continent, and Absa has regional ambitions. The question is whether East African regulators will allow foreign banks to dominate their financial systems, or whether they'll impose restrictions to protect domestic champions.

Buy Now, Pay Later Explodes in South Africa

Buy Now, Pay Later (BNPL) usage doubled between 2024 and 2025 in South Africa, per payment provider Payfast's State of Pay 2025 report. BNPL jumped from 3% to 6% of online transactions, and 34% of consumers now ask merchants to add the feature. Card payments still dominate at 54%, but BNPL's trajectory tracks global trends where flexible credit reshapes consumer behaviour.

Why it matters:
BNPL drives big-ticket sales and higher margins, particularly in electronics and fashion. For banks, it's both competition and collaboration - traditional instalments compete with BNPL platforms like Payflex, PayJustNow, and Happy Pay, but on the flipside, these platforms also create new lending ecosystems banks can plug into.

State of Play:
Mobicred, another credit facility, reported 32% usage. Over 45,000 merchants use the Mobicred network, with new customers spending an average of R8,000 and existing customers spending R1,400. South Africa's largest online retailer, Takealot, partnered with Payflex to stay competitive.

Brief Catch Up:
Before BNPL, retailers - particularly in electronics and furniture - offered 12-, 24-, and 36-month instalments. BNPL platforms guarantee full payment to merchants while customers pay small amounts upfront and spread balances over weeks. The model has endorsements from Apple, PayPal, and PayU (Naspers).

Zoom In:
BNPL growth doesn't confirm overall credit expansion, but it signals shifting payment behaviour. For banks: compete, partner, or acquire? Some are exploring white-label BNPL to retain customer relationships without ceding transaction flow to fintechs.

Be smart:
Watch for regulatory scrutiny. As BNPL grows, so does concern about over-lending and consumer debt. The National Credit Regulator (NCR) will likely step in with clearer frameworks, especially as traditional credit bureaus struggle to capture BNPL behaviour.

THE SCOOP

• South Africa's inflation dropped to 3.5% in November, down from 3.6%, edging closer to the SARB's new 3% target and boosting odds for a January rate cut (Via Moneyweb)

• Investec bucks bearish sentiment by upgrading Cell C to "buy," arguing the market overlooks the telecom's balance sheet reset and free cash flow inflection after its November JSE listing (Via Business Day)

• Zimbabwean gold miner Caledonia secured $150 million for its Blanket Mine in a rare international capital raise for the country, signalling cautious investor interest despite economic turmoil (Via Reuters)

• Standard Bank will open 20 new branches offering Smart ID and passport services in early 2026, part of Department of Home Affairs' plan to add 100 bank-based service sites by March 2026 (Via Moneyweb)

• Kenya breaks its 11-year IPO drought, with the first listing expected to revitalise the Nairobi Securities Exchange and draw renewed investor interest (Via TechCabal)

 📊 POLICY WATCH

+ THIS

In January 1999, the Euro officially launched as an accounting currency in 11 European Union countries, marking one of the most ambitious monetary experiments in history. Banks scrambled to update systems, recalibrate foreign exchange desks, and train staff on dual pricing. The physical notes and coins wouldn't arrive until 2002, but the groundwork for a unified currency zone began on this day. Twenty-seven years later, the Euro remains the world's second-most-traded currency - and a case study on the challenges of harmonising monetary policy across diverse economies.