NCBA Group's Revenue Predicted to Surge by 33% in the Next 3 Years

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PapaDanico001
Community Contributor
Published
09 Jan 25
Updated
14 Jun 25
PapaDanico001's Fair Value
KSh55.51
13.5% overvalued intrinsic discount
14 Jun
KSh63.00
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1Y
54.2%
7D
-0.8%

Author's Valuation

KSh55.5

13.5% overvalued intrinsic discount

PapaDanico001's Fair Value

Last Update14 Jun 25

PapaDanico001 made no meaningful changes to valuation assumptions.

NCBA Group Plc, formed by the merger of NIC Group Plc and Commercial Bank of Africa in 2019, stands as one of East Africa's largest financial services groups, prominently listed on the Nairobi Securities Exchange under the ticker NCBA. The group has established itself as a vital player in the financial landscape, offering a diverse range of services across several key segments, including retail banking, corporate and institutional banking, asset finance, treasury operations, investment banking, and a burgeoning digital banking sector.

In retail banking, NCBA provides an array of products such as current and savings accounts, personal loans, mortgages, and innovative digital solutions like M-Shwari and Fuliza, stemming from partnerships with Safaricom. The corporate banking segment serves the financial needs of larger businesses and government entities, while the asset finance division leads the market in funding for vehicles and equipment. Additionally, NCBA operates an investment bank that delivers corporate finance advisory and wealth management services.

Beyond its stronghold in Kenya, NCBA has expanded its reach across Uganda, Tanzania, Rwanda, and Côte d'Ivoire, creating a network that enhances its revenue streams. The group recently expanded its offerings by acquiring AIG Kenya, which allows it to integrate insurance services into its portfolio.

Financially, NCBA demonstrated remarkable performance in 2024, reporting a profit after tax of KES 21.5 billion, up significantly from KES 13.8 billion in 2022. With total assets growing by 18.6% and notable increases in customer deposits and loans, the bank's financial position appears robust. The first half of 2024 continued to show positive momentum with a profit after tax of KES 9.8 billion.

NCBA operates in a competitive banking environment alongside other major players like Equity Group and KCB Group, maintaining a strong market share, particularly in asset finance and digital lending. Its commitment to innovation and expansion into new markets positions it well for future growth. The bank's consistent dividend payments underscore its financial stability, reflecting a commitment to shareholder returns. Overall, NCBA Group Plc is poised for continued success in the evolving financial services sector.

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Disclaimer

The user PapaDanico001 has a position in NASE:NCBA. Simply Wall St has no position in any of the companies mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The author of this narrative is not affiliated with, nor authorised by Simply Wall St as a sub-authorised representative. This narrative is general in nature and explores scenarios and estimates created by the author. The narrative does not reflect the opinions of Simply Wall St, and the views expressed are the opinion of the author alone, acting on their own behalf. These scenarios are not indicative of the company's future performance and are exploratory in the ideas they cover. The fair value estimates are estimations only, and does not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that the author's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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