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Absa gains Sh7bn as parent firm offers premium price
ABSA Bank CEO Abdi Mohamed delivering his speech during the ABSA Bank Kenya 2023 Sustainability report launch at Serena hotel in Nairobi on September 5, 2024.
Absa Bank Kenya’s share price jumped 4.59 percent on Friday, representing a gain of Sh7.33 billion as investors reacted to Absa Group Limited’s bid to raise its stake in the Kenyan subsidiary at a premium price of Sh34.5.
The Nairobi Securities Exchange-listed firm's stock touched a high of Sh33 and closed trading at an average price of Sh30.75, giving it a market value of Sh167 billion.
The lender’s stock rose from Sh29.4 on Thursday when its market capitalisation stood at Sh159.6 billion.
The price jump has slightly narrowed the gap with Absa Group’s offer which is seen as a bullish signal on the target firm’s future prospects.
A total of 3.49 million shares changed hands on Friday, valuing the deals at Sh107.5 million. Those who bought the shares will be in a position to profit from selling the units to the multinational.
Baloobhai Patel is among the beneficiaries of the bank’s share price growth, with the billionaire investor recording a gain of Sh135.1 million on the day.
Mr Patel’s holdings of 100 million shares –based on Absa Bank’s latest annual report— were valued Sh3.07 billion on Friday. Their value had risen from Sh2.94 billion on Thursday.
Absa Bank becomes the latest lender to stage major share price gains catalysed by mergers and acquisitions announcements.
NCBA Group’s stock also surged from Sh75 in mid-October 2025 –when news broke that South Africa’s Standard Bank Group was keen to acquire the company— to highs of Sh100 after the lender was later confirmed to be the buyout target of Nedbank Group.
NCBA’s share price subsequently lost some ground and closed at Sh90 on Friday, leaving it still higher compared to the pre-deal level.
Absa Group has offered Sh30.9 billion or Sh34.5 per share to buy an additional 16.5 percent stake in the Kenyan subsidiary. This will lift its ownership to 85 percent from the current 68.5 percent.
The multinational says it intends to retain the Kenyan unit’s listing on the Nairobi bourse on completion of the deal and has sought an exemption from the Capital Markets Authority (CMA) from making a full buyout offer to all minority shareholders.
This means it will buy a maximum of 895.9 million shares in the proposed tender offer, giving it a larger share of the subsidiary’s earnings.
The Kenyan business has significantly raised its profits and dividend payouts while improving returns on shareholders’ funds since it separated from its former ultimate parent firm Barclays Plc in 2020.
The company’s return on equity (RoE), the metric that determines a company’s profitability by measuring how much profit it generates from shareholders’ capital, has risen steadily from 16.4 percent in 2019 –the year before it completed its separation from Barclays. That metric rose to peak at 24.5 percent in 2024 before moderating to 22.8 percent in 2025.
Net earnings meanwhile surged from Sh7.4 billion in 2019 to Sh22.9 billion last year while dividends increased from Sh6 billion to Sh11.1 billion over the same period.
Barclays previously set the risk appetite for the South African multinational (then trading as Barclays Africa Group Limited) which in turn cascaded the policies to different subsidiaries including the Kenyan unit.
After the split, the reporting line for the Kenyan business stopped at the South African firm which is keen to grow in the African continent.
Absa Group says the proposed increase in its stake in the Kenyan subsidiary aligns with its broader strategy around Africa expansion and presenting its clients with strong regional and global opportunities.
“The proposed acquisition through this tender offer is a natural extension of the group’s commitment to build a diversified pan-African franchise,” the multinational said.
“Absa Group regards East Africa as a cornerstone of its pan-African growth ambitions.
“Absa Group’s strategy is to deepen presence in high potential markets, improve returns through scale and enhance corridor capabilities connecting clients to regional and global opportunities.”
The South African firm has been on a regional expansion drive ever since Kenny Fihla assumed leadership on June 17, 2025.
In early June 2026, Absa Group received the green light from Bank of Uganda to acquire Standard Chartered Bank’s Wealth and Retail business unit, paving way for consummation of a deal whose process started in October 2025.
