The NCBA Story: Who held it, and how?
In nineteen sixty two, a bank was founded in Dar es Salaam, in what was then Tanganyika.
It was controlled by a consortium based in Switzerland, alongside other international financial institutions. It was called Commercial Bank of Africa.
In nineteen sixty seven, Tanzania nationalised its private banks, and Commercial Bank of Africa moved its headquarters north, to Nairobi.
In nineteen eighty, Bank of America bought out the Swiss partners and took eighty four per cent of the bank.
Before that decade was over, Bank of America had sold its stake down, and gone.
By December twenty seventeen, its largest single shareholder was the Kenyatta family, the family of Kenya’s sitting president, with about a quarter of the bank.
The family did not found this bank. Foreign financiers did, in another country, fifty five years earlier.
In twenty nineteen, the bank merged with another Kenyan lender, and the two became NCBA.
And in twenty twenty six, control of NCBA is passing to Nedbank, of South Africa.
DAR ES SALAAM
In nineteen sixty two, Dar es Salaam was the capital and the main port of a country barely a year into its independence.
Commercial Bank of Africa was set up there by a consortium based in Switzerland, working alongside other international financial institutions.
Its owners were foreign, and its first home was not Kenya.
Branches followed soon after, in Nairobi, in Mombasa, Kenya’s port, and in Kampala, the capital of Uganda.
Within a few years of its founding, the bank was working in three East African countries.
In nineteen sixty seven, Tanzania’s ruling party set out a socialist programme in the Arusha Declaration. Days later, the government took the country’s private banks into state ownership.
Commercial Bank of Africa did not choose to leave. Its business in Tanzania was nationalised, and it moved its headquarters to Nairobi.
Kenya had been independent for less than four years.
The bank landed in Nairobi, and it stayed. From nineteen sixty seven to this day, it has been run from that city.
Four years later, it left a second country.
After the coup that brought Idi Amin to power in Uganda in nineteen seventy one, Commercial Bank of Africa withdrew from Uganda.
A bank founded in one country had been pushed out of it, and had withdrawn from a second. What remained was a bank in Kenya, owned from abroad.
In nineteen eighty, the owner changed. Bank of America bought out the Swiss partners and took a stake of eighty four per cent.
The consortium that founded the bank had held it for eighteen years. Now one owner held almost all of it, and that owner was one of the largest banks in the United States.
For a time, Commercial Bank of Africa was, in effect, an American bank in Nairobi.
It did not stay. Through the nineteen eighties, Bank of America sold its stake down, piece by piece.
By the end of that process, Commercial Bank of Africa had passed fully into Kenyan private hands. The foreign owners who had founded it, and the one who had bought it, were gone.
In less than three decades, the bank had been founded abroad, pushed across a border, bought, and sold down.
In Tanzania, the state had taken the banks. In Kenya, this one passed to private shareholders.
In December twenty seventeen, the largest single shareholder in Commercial Bank of Africa was a company called Enke Investments. It held roughly a quarter of the bank.
A quarter is not a majority. The other three quarters were spread among other shareholders, none of whom held as much.
Enke Investments is the company through which the Kenyatta family holds its shares.
Large parts of the family’s business interests, this stake among them, are managed by Muhoho Kenyatta, the younger brother of Uhuru Kenyatta, who was then Kenya’s president.
Between Bank of America’s departure and December twenty seventeen, no record in our research says how or when the Kenyatta family came to own a quarter of this bank.
By twenty seventeen, they did.
THE GOVERNORS
In nineteen fifty nine, three years before Commercial Bank of Africa was founded, another lender was set up in Kenya.
Kenya was still a British colony. Independence was more than four years away.
Nairobi was a colonial capital, and most of its banks were branches of institutions based abroad.
The new lender was a joint venture between two institutions. One was Standard Bank. The other was Mercantile Credit, a company from the United Kingdom.
Mercantile Credit was a finance house, the kind of company that lends people the money to buy something and is repaid in instalments.
The new lender was called NIC. It did not begin as a bank taking deposits from the public. It was an asset finance lender.
It lent against things: vehicles and equipment, the lorries, tractors and machines that businesses need and cannot always pay for at once.
A transporter could take a lorry now, and pay for it over time. The lender’s security was the lorry itself.
In time, NIC became a bank as well, taking deposits of its own.
Over the decades that followed, NIC came under the control of a Kenyan family, the Ndegwas.
Two members of that family hold a place in the history of Kenyan banking. Philip Ndegwa and Duncan Ndegwa each served, at different points, as governor of the Central Bank of Kenya.
Both were also senior civil servants in the government of Jomo Kenyatta, Kenya’s first president.
Philip Ndegwa began his career as a government officer. He died in nineteen ninety six.
The Kenyan press has often described him as the first Kenyan to bank a billion shillings.
In the next generation, James and Andrew Ndegwa inherited the family’s stake, consolidated it, and took the lead on NIC’s board.
Andrew, Philip Ndegwa’s son, served for many years as a director, representing the family’s shares.
Commercial Bank of Africa’s history is a list of owners arriving and leaving. NIC’s ownership moved from the two institutions that founded it to a Kenyan family, and then from one generation of that family to the next.
By twenty eighteen, NIC was a banking group, controlled by that family, and still doing the work it had been founded for nearly sixty years before: financing the vehicles and equipment that businesses in Kenya ran on.
THE PHONE
On the twenty seventh of November, twenty twelve, Commercial Bank of Africa and Safaricom, the mobile network operator, launched a product called M-Shwari.
It offered savings and loans on a mobile phone, and it was the first product of its kind in Kenya.
It lived inside M-Pesa, Safaricom’s mobile money service, which Kenyans already used to send and receive money by phone.
A customer did not need to visit a branch. The account lived on the phone, and so did the loan.
Savings earned interest, and the size of the loan a customer could take was set from their history on the network.
Safaricom brought the customers and the network. The bank held the deposits and made the loans.
The executive who drove it at the bank was Isaac Awuondo, Commercial Bank of Africa’s managing director.
Under him, lending on phones became the business the bank was best known for.
A second product followed, called Fuliza. It was an overdraft on the phone.
If a customer tried to send more money than they had, Fuliza lent them the difference on the spot.
Through M-Shwari and Fuliza, the bank became one of the two dominant players in digital credit on Kenyan phones.
NCBA now reports more than sixty million customers, for a bank with a hundred and twenty two branches. Most of those customers are digital loan accounts, not people at a counter.
For most of the people who bank with it, this bank is something on their phone.
M-Shwari charged a flat fee of seven and a half per cent on each loan, the same however long the loan ran.
Borrow a thousand shillings, and the fee was seventy five shillings, whether the loan was repaid the next day or at the end of the month.
A flat fee does not get smaller when a loan is repaid early. The shorter the loan, the more that fee costs for each day of borrowing.
NCBA’s management has acknowledged, in public, the pressure over whether that pricing is punitive or predatory.
Most of the loans were small. When they went unpaid, the borrowers’ names were listed with credit reference bureaus.
Credit reference bureaus keep the repayment records that lenders check before they lend. A listing follows a borrower to every lender who looks.
Over small unpaid debts on their phones, millions of Kenyans were locked out of formal credit.
The debts were small. The consequence was not.
Every account of this in our research comes from the bank, the mobile network or the regulator, and not one person who was listed is on the record.
In twenty twenty two, William Ruto, who became Kenya’s president that year, called the practice of listing borrowers over small digital loans arbitrary, and punitive. Those were his words.
It was a criticism of a practice across digital lending, not of one lender.
What followed was negotiated. Across twenty twenty three and twenty twenty four, under the guidance of the Central Bank of Kenya, NCBA, Safaricom and KCB agreed a credit repair scheme.
In its own books, NCBA wrote off billions of shillings in digital loans.
And more than four million borrowers had their names removed from the credit reference bureaus.
THE MERGER
In December twenty eighteen, Commercial Bank of Africa and NIC announced that they would merge.
Commercial Bank of Africa was the larger bank, and the better known, largely through M-Shwari and Fuliza.
But the deal ran the other way. Commercial Bank of Africa’s shareholders exchanged all of their shares for fifty three per cent of an enlarged NIC.
Commercial Bank of Africa’s owners did not buy NIC. They swapped their bank for most of it.
Bankers call this a reverse merger. The larger business is folded into the legal body of the smaller one.
NIC was the company that survived in law, and it was renamed NCBA.
NIC’s chief executive, John Gachora, who had led the merger, became chief executive of the whole group.
The larger bank’s owners took the majority. The smaller bank’s legal shell, the root of its name and its leader carried on.
The group’s chairman today is John Ndegwa, a member of the family that had controlled NIC.
By the arithmetic of that exchange, the Kenyatta family’s quarter of Commercial Bank of Africa became a stake of about thirteen per cent in the merged group.
The family no longer held a quarter of one bank. It held about an eighth of a larger one.
The share transfer came with a decision from the National Treasury, Kenya’s finance ministry. Under Cabinet Secretary Henry Rotich, in President Uhuru Kenyatta’s government, the Treasury exempted it from stamp duty.
A Cabinet Secretary is Kenya’s title for a government minister.
Stamp duty is a tax charged when property, including shares, changes hands. On this transfer, none was to be charged.
On the twenty seventh of September, twenty nineteen, the Central Bank of Kenya gave its final approval.
On the first of October, twenty nineteen, the two banks became one. NCBA opened as the third largest bank in Kenya by assets, behind KCB and Equity, with close to four hundred and ninety billion shillings on its books, about four point nine billion dollars.
In March twenty twenty three, with William Ruto now president, the Treasury under Cabinet Secretary Njuguna Ndung’u reversed the exemption.
It directed the Kenya Revenue Authority, the national tax collector, to collect three hundred and eighty four point five million shillings from NCBA.
In November twenty twenty five, the High Court quashed the exemption, finding it unlawful and not in the public interest. NCBA has appealed.
NCBA asked the court to pause collection of the tax while it appealed, and that request was denied. A ruling from the Court of Appeal is expected in November twenty twenty six.
Of everything on the record in this story, this is the one place where the family’s ownership of the bank and the power of the state meet directly.
A Treasury in President Uhuru Kenyatta’s government exempted from tax the merger of the bank in which his family was the largest single shareholder.
How the family came to hold its stake is not in any record this research found. This decision is.
In twenty twenty five, NCBA’s net profit was more than twenty three billion shillings. The sum in dispute is less than two per cent of that.
The weight of it is not in the money. It is in who granted the exemption, and under which president. The Court of Appeal has not ruled.
THE SALE
On the twenty first of January, twenty twenty six, Nedbank, one of South Africa’s large banking groups, announced that it intended to buy about sixty six per cent of NCBA.
Nedbank said the purchase was about accelerating its growth in East Africa.
The price was about thirteen point nine billion rand, around eight hundred and forty two million dollars.
Twenty per cent of it was to be paid in cash. Eighty per cent was to be paid in new Nedbank shares, listed on the Johannesburg Stock Exchange.
The offer price was reported at a hundred and five shillings a share.
Both families took part. The Kenyatta holding, through Enke Investments and through Muhoho Kenyatta’s own shares, went largely into the offer. So, largely, did the Ndegwa family’s.
In return, both families take mostly Nedbank shares. They become shareholders in a South African bank, and they keep part of NCBA.
That is not a sale for cash. Four fifths of the price is paid in the buyer’s own shares.
The families are exchanging control of a Kenyan bank for a minority stake in a South African one, and a smaller holding in the Kenyan bank they are handing on.
The value of most of what they receive now rises and falls with Nedbank’s share price.
The thirty four per cent that Nedbank is not buying stays listed in Nairobi, and the families’ remaining shares are part of it.
What Nedbank is buying is a bank that grew through twenty twenty five. Its total assets reached seven hundred and sixteen billion shillings, and customer deposits five hundred and thirty two billion.
Its profit before tax was twenty seven point nine billion shillings, eleven per cent more than the year before.
Revenue rose fourteen per cent, to sixty five point three billion shillings.
Its digital lending has become a comparatively settled business, run on terms negotiated with the Central Bank.
It is also buying the business NIC was founded to do, grown. NCBA holds an estimated thirty five per cent of Kenya’s market for vehicle and equipment finance.
As the economy came under strain, more of those loans went bad, and repossessions rose. The bank bought a yard to hold the vehicles it had seized, and has auctioned dozens of repossessed trucks and cars at a time.
Borrowers have complained, on social media and in the local press, of vehicles taken soon after a missed instalment, of storage, towing and auction fees that kept climbing, and of disputes over releasing vehicles even after arrears were cleared.
The complaints recur, and they come through the press, not through any regulatory finding.
No borrower whose vehicle was taken is on the record in our research, and neither is the bank’s answer to any specific complaint.
Nedbank also inherits a dispute that began in twenty seventeen, when NIC and another lender together lent to a logistics company called Multiple Hauliers.
In twenty twenty one, the company went into administration, with debts reported at more than thirty one billion shillings, against a fraction of that in assets.
Administration means the company is run by an administrator on behalf of those it owes.
Its shareholders and guarantors allege that the lenders never fully paid out the loan. At the London Court of International Arbitration, they seek eighty eight billion shillings in damages.
Arbitration is a private tribunal that the parties have agreed to use instead of a court.
The hearing is set for March twenty twenty seven. The claim is disputed, and nothing on the record establishes who is right.
The stamp duty appeal comes with the bank as well.
The offer closed on the tenth of July, twenty twenty six, with seventy nine point nine per cent acceptance from shareholders.
On the twenty eighth of August, twenty twenty six, the Central Bank of Kenya approved Nedbank’s purchase of up to sixty six per cent of NCBA.
Control of the bank is passing from two Kenyan families to Nedbank.
By the company’s account, NCBA keeps its listing in Nairobi. John Gachora remains group chief executive, James Gossip, appointed in May twenty twenty five, remains managing director of the Kenyan bank, and local management stays in place.
A bank founded in Dar es Salaam by a consortium based in Switzerland. Bought by an American bank, which sold down and left.
Its largest shareholder, by twenty seventeen, the Kenyatta family. Joined to a second bank, controlled by the Ndegwa family.
And now, passing to a South African bank. The families did not sell and walk away. They exchanged control, mostly for that bank’s shares.
The two families still hold a piece of the bank, and now they hold a piece of its buyer.
The Court of Appeal has yet to rule on the stamp duty. The Multiple Hauliers hearing is set for March twenty twenty seven.
And the bank’s new owner has not yet written its next chapter.
That is where this story stands, as of the twenty eighth of September, twenty twenty six.
This is Asili Africa. Every empire has an origin. See you on the next one.
Key Takeaways
- DAR ES SALAAM. In nineteen sixty two, Dar es Salaam was the capital and the main port of a country barely a year into its independence.
- THE PHONE. On the twenty seventh of November, twenty twelve, Commercial Bank of Africa and Safaricom, the mobile network operator, launched a product called M-Shwari.
- THE MERGER. In December twenty eighteen, Commercial Bank of Africa and NIC announced that they would merge.
- THE SALE. On the twenty first of January, twenty twenty six, Nedbank, one of South Africa’s large banking groups, announced that it intended to buy about sixty six per cent of NCBA.
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