NCBA, backed by Kenya’s richest families, earns $2.1 million from AIG sale

Key Points

• NCBA earned $2.1 million from its full acquisition of AIG Kenya, capitalizing on a below-book-value deal to enhance its financial services sector footprint.
• The acquisition increases NCBA’s control, allowing for integrated financial solutions and regional dominance in the insurance sector.
• Despite a revaluation loss, NCBA’s strategic acquisition reinforces its long-term growth strategy, bolstering profitability and customer engagement.

NCBA Group, a leading financial services conglomerate partly owned by some of Kenya’s wealthiest families, has earned a profit of Ksh266.8 million ($2.1 million) from its full acquisition of AIG Kenya Insurance (AIG Kenya), leveraging a below-book-value deal to extract immediate value. The move marks a strategic step by NCBA to expand its footprint in Kenya’s financial services sector and drive long-term value across its growing customer base.

NCBA gains $2.1 million from AIG Kenya deal

Having already owned 33.33 percent since 2006, the profit stems from a bargain purchase gain recorded after the Nairobi Securities Exchange (NSE)-listed lender on July 1, 2024, paid Ksh1.075 billion ($8.4 million) for the 66.66 percent stake it didn’t already own in the insurer, whose net asset value stood at Ksh2.03 billion ($15.71 million).

NCBA Group earned a profit of Ksh266.8 million ($2.1 million) from its acquisition of AIG Kenya, capitalizing on a deal that gave it full control of the insurer at a price significantly below the firm’s net asset value. Despite the gain, the transaction also led to a revaluation loss of Ksh273 million ($2.11 million), after the bank adjusted the book value of its original stake in AIG Kenya from Ksh943 million ($7.3 million) to a fair value of Ksh670 million ($5.19 million).

“This acquisition allows us to deliver more integrated financial solutions while expanding our footprint in the insurance sector,” said Tirus Mwithiga, NCBA Group Director for Retail Banking. “It reinforces our long-term strategy of driving financial inclusion and providing end-to-end financial services to our customers.”

NCBA eyes regional dominance in insurance business

Backed by influential shareholders like the Kenyatta and Merali families, NCBA is strategically expanding to drive profitability and scale. The group posted a 1.91 percent rise in annual profit to Ksh21.87 billion ($169.16 million) in 2024, ended December 31.

While total assets fell 9.35 percent to Ksh665.94 billion ($5.15 billion), equity grew 13.5 percent to Ksh109.71 billion ($848.81 million), reflecting a stronger capital base. The full acquisition of AIG Kenya, a subsidiary of American International Group Inc., positions NCBA to enhance cross-selling, deepen customer engagement, and integrate insurance services across its banking channels. This reinforces NCBA’s strategy to leverage acquisitions for growth in key sectors.