In the fiscal year ended 31st December 2025, NCBA Group (NSE: NCBA) asset base expanded by 7.5% year-on-year surpassing the KES 700B mark to KES 716B, driven by growth in deposits and loans. The Group’s customer deposits expanded by 6% YoY to KES 531.9 billion, while the loan book grew by 5% to KES 15.1B.
Interest income was generally muted, with that from loans and advances falling by double-digit at 14.6% to KES 39.7 billion. Income from government securities reached KES 24.9 billion, which declined 2.6% relative to the previous year. In total, interest income declined by 10% to reach KES 68.1 billion.
Total interest expenses declined by 42% YoY, or an absolute equivalent of KES 17B. The fall in interest expenses helped to cushion the net interest income, which grew by 27% to KES 44.1 billion. Non-interest income grew by 4% to KES 29.3B, and combined with net interest income, operating income for the year totaled KES 73.3 billion, up 17%.
NCBA Group Profitability and Returns
Group Profit Before Tax (PBT) edged higher by 11% YoY to reach KES 27.9 billion, with core banking subsidiaries contrbuting the bulk of the profit at KES 17.4 billion, equivalent to more than 62% of Group PBT.
Here is how the Group’s subsidiaries performed in relation to the Group’s profit before tax in FY25:
1. Core banking subsidiaries: +6% YoY to KES 17.4B
2. Non-banking subsidiaries: +16% YoY to KES 1.5B
3. Digital banking subsidiaries: +20% YoY to KES 8.9B
The group recorded KES 23.4 billion in net income, a growth of 7%, with Earnings Per Share standing at KES 14.20, up 7.01%. The Board of Directors recommended a final dividend of KES 4.60 (FY24: KES 2.25), and in addition to a KES 2.50 interim dividend per share (FY24: 2.25), the total dividend per share for FY2025 is KES 7.10, up 29%. This translates to a dividend payout ratio of 50%, up from 41.4% in FY24, and a dividend yield of 8% given the prevailing NCBA Group share price of KES 88.75.
Regional Diversification and Update on Nedbank-NCBA Transaction
The Kenyan banking operation anchored earnings, with total income standing at KES 60 billion, followed by NCBA Uganda at KES 4.0 billion, KES 2.7 billion in Tanzania, and KES 2.5 billion in Rwanda. Non-bank subsidiaries contributed KES 3.4 billion.
Nedbank Group, which is listed on the Johannesburg Stock Exchange (JSE: NED), is acquiring 66% of the shareholding in NCBA Group in a 80% shares and 20% cash transaction valued at USD 850 million. This transaction values NCBA at a Price-to-Book ratio of 1.4X. The 80% shares component will see shareholders allocated new Nedbank ordinary shares listed at the JSE. However, worth noting is that shareholders who would have accepted the offer and hold less than 200 Nedbank shares shall be paid in cash the worth of their consideration.
At the close of the transaction, which is expected by Q3 2026 subject to approvals by the relevant regulators, 34% of the remaining shares in NCBA Group will remain listed at the Nairobi Securities Exchange (NSE). NCBA is currently trading at KES 88.75 per share at the NSE, up 6% year-to-date and trading at at a Price-to-Earnings ratio 6.25, while Nedbank is trading at KES 2,095.52 per share at the JSE, up 3.32% year-to-date and trading at a Price-to-Earnings ratio of 7.42.
Also Read: KMRC Total Assets Surge 33.6% to KES 43.2 Billion Amidst Profitability Headwinds
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