Absa joins other SA banks in Kenya expansion

Absa on Friday announced it intends to up its stake in Kenyan subsidiary Absa Bank Kenya to 85% from 68.5% in a R4bn transaction that marks a growing push by South African banks to mark their territory in the East African market.

Absa is the latest South African bank to expand its footprint into Kenya after Nedbank announced its plan to acquire a majority stake in one of the biggest commercial banks in that country after exiting West Africa’s Ecobank.

Standard Bank also reportedly aims to become Kenya’s biggest bank in 2030 against the backdrop of a strong infrastructure investment pipeline, a robust economic growth trajectory and a youthful population.

Absa, which operates in 12 African countries, the US, UK and China, and with 13-million customers, acquired an additional 896-million shares representing 16.5% in the East African subsidiary in line with its commitment to be a pan-African group.

The move comes weeks after Absa’s Ugandan unit agreed to take over Standard Chartered Uganda’s wealth and retail business.

Absa is betting on infrastructure investment in East African markets to continue helping the growth of these markets with expectations of annual GDP growth of 5% in Kenya, Tanzania and Uganda in the next five years.

This proposed transaction reflects our confidence in Absa Bank Kenya’s leadership, strategy and long-term growth prospects, as well as our continued commitment to supporting Kenya’s economic development

—  Charles Russon, Absa group executive for Africa regions

“The proposed acquisition by Absa Group of additional ordinary shares through this tender offer is a natural extension of the group’s stated commitment to building a diversified, pan-African franchise and is a powerful demonstration of its long-term confidence in Absa Kenya, in the resilience and dynamism of the Kenyan banking sector, and in the economic future of East Africa,” the group said.

Charles Russon, group executive for Africa regions, said the acquisition supported the group’s pan-African strategy and cemented its commitment to high-growth markets. “Kenya is a strategically important market for Absa Group and remains central to our East Africa growth ambitions,” he said.

“This proposed transaction reflects our confidence in Absa Bank Kenya’s leadership, strategy and long-term growth prospects, as well as our continued commitment to supporting Kenya’s economic development.”

The bank said it aimed to maintain Absa Bank Kenya’s listing on the Nairobi Securities Exchange after the completion of the tender offer.

The bank’s Africa regions outside South Africa already contribute signifcantly to the group and accounted for 31% of headline earnings in 2025.

Group CEO Kenny Fihla unveiled a strategy focused on four key pillars: customer-led growth, a diversified pan-African business, excellence and new growth opportunities.

The group’s strategy is centered on addressing the “over-concentration” in South Africa, Ghana and Kenya from a geographic perspective. It aims to bolster SME growth, drive organic growth on the continent, and maximise productivity.

The group expects the contributions from the African regions to increase over the medium term, given the stronger GDP in the rest of Africa markets.

Absa’s push into East Africa comes amid reports that Standard Bank, Africa’s biggest bank by assets, which operates in Kenya through Stanbic, aims to become the biggest lender in that country by 2030

It foresees opportunities in Tanzania and Uganda, given the infrastructure investments needed, and Mozambique, despite current sovereign debt challenges.

While Kenya’s real GDP grew by 4.8% in 2025, reflecting robust economic activity despite risk, Absa said the Kenyan and Tanzanian markets were increasing efforts to develop their hydrocarbon resources. However, it warned in its 2025 integrated annual report that fiscal risks had increased in Kenya and Uganda but remained “manageable”.

Absa’s push into East Africa comes amid reports that Standard Bank, Africa’s biggest bank by assets, which operates in Kenya through Stanbic, aims to become the biggest lender in that country by 2030.

Nedbank in January announced a R13.9bn acquisition of the majority stake in Kenya’s NCBA Group, marking a push in the group’s strategy to grow in southern and east Africa.

Nedbank CEO Jason Quinn at the time said the proposed acquisition represented a milestone in their strategy to grow Nedbank’s southern and east African footprint.

Quinn said Nedbank had zoomed in on Kenya, given the East Africa region’s strategic importance, underpinned by strong macroeconomic fundamentals; the size of its economy; and a large and growing population. It said East Africa was attractive as the primary trade corridor that links Africa with the Middle East, India and the rest of Asia, with regulatory certainty.

“NCBA offers a strong brand presence, an extensive regional network, advanced digital capabilities, and deep customer reach, which naturally aligns with Nedbank’s established corporate and investment banking expertise, cross-border structuring capabilities, and strong balance sheet. By combining NCBA’s substantial local presence and Nedbank’s capital base, expertise, and enduring commitment to Africa, we see a compelling platform for sustainable growth in the region,” Quinn said.