Breakdown using both FY2024 & Q3 2025 results
1. Summary — Is NCBA Shares a Good Buy?
If you want a stable, consistent, strong, and dividend-heavy bank on the Nairobi Securities Exchange, NCBA is one of the best choices.
Why NCBA Stands Out
- Strong profits (KSh 16.4B PAT in Q3 2025)
- Very healthy capital position
- Strong digital lending engine (over KSh 1 trillion in loans)
- Very reliable dividend payer
- Conservative and safe risk management
- Low chance of collapsing or wiping shareholder value
It’s not a “rocket ship” stock, but it’s a safe and rewarding long-term investment.
✔ Recommendation
- BUY → For long-term, dividend-focused, and low-risk investors
- HOLD → If you already own NCBA
- NOT for short-term speculators who want quick price jumps
NCBA is the kind of investment where you sleep well and collect dividends.
💰 2. Financial Performance (Income Statement View)
(Based on Q3 2025 + FY2024 trends)
Q3 2025 Highlights
- Profit After Tax (PAT): KSh 16.4B (↑ 8.5%)
- Profit Before Tax (PBT): KSh 20.5B (↑ 11.1%)
- Operating Income: KSh 53.4B (↑ 13.8%)
- Digital Loans Disbursed: KSh 1 Trillion (↑ 35%)
- Operating Costs: KSh 27.9B (↑ 14%)
- Credit Provisions: KSh 5.1B (↑ 24.5%)
Interpretation
- ✔ NCBA IS GROWING — Revenue is rising strongly, especially from digital lending, corporate banking, transaction fees and regional subsidiaries.
- ✔ Profits are stable and rising — NCBA is increasing profits despite economic pressure.
- ⚠ Costs are rising — branch expansion, salary adjustments, and tech investments (normal for a growing bank).
- ⚠ Provisions are rising — digital loans have more risk, but NCBA is increasing loan-loss buffers.
🏦 3. Balance Sheet – Assets, Liabilities & Stability
(FY2024 vs Q3 2025 comparison)
Total Assets
- FY2024: KSh 665.94B
- Q3 2025: KSh 665B
👉 Assets are flat — the bank is being conservative and not taking unnecessary risks.
Customer Deposits
- FY2024: ~KSh 502B
- Q3 2025: KSh 488B (↓ 5.3%)
👉 Deposits fell because customers are chasing higher interest offers elsewhere — sector-wide, not NCBA-specific.
Shareholders’ Equity
👉 NCBA is very well-capitalized and extremely safe.
Liabilities
- Slight decrease due to deposit reductions
- Borrowings remain manageable
Interpretation:
- NCBA has a very strong balance sheet
- No dangerous debt
- No liquidity crisis
- No solvency issues
- Capital ratio is excellent
- Risk exposure is controlled
This is why NCBA feels like a “safe bank to own.”
📉 4. Asset Quality – Health of NCBA’s Loan Book
- NPL (Non-Performing Loan) Coverage: 68.9% (NCBA has money set aside to cover most bad loans)
- Credit impairment charges increased to KSh 5.1B
- Subsidiaries improved loan collections
Explanation: Banks lose money when customers fail to repay loans. NCBA has fewer risky loans than peers, more provisions to cover bad loans, and stronger digital collections — so it’s better protected if the economy worsens.
📈 5. Revenue Streams – Why NCBA is Always Profitable
NCBA makes money from many areas, not just loans.
- a) Digital Banking — M-Shwari, Fuliza, overdrafts, mobile lending. NCBA is #1 digital lending bank in East Africa (high interest, huge volumes).
- b) Corporate Banking — trade finance, FX trading, NCBA ConnectPlus.
- c) Asset Finance — #1 motor vehicle & equipment financier in Kenya.
- d) Regional Subsidiaries — grew PBT to KSh 2.6B (strong performance).
- e) Non-Banking Subsidiaries — contributed KSh 1.2B (↑48%).
Interpretation: NCBA makes money from everywhere. If one sector is weak, others support it — lowering risk and increasing stability.
🪙 6. Dividends – NCBA is a Dividend Machine
NCBA has one of the strongest dividend records on the NSE.
Recent Dividends
- 2025 Final: KSh 3.25
- 2025 Interim: KSh 2.50
- 2024 Final: KSh 3.00
- 2024 Interim: KSh 2.25
Average annual payout: KSh 5.50 – 5.75 per share
At a share price around KSh 45–55, the dividend yield becomes: 10% to 13% — very rare in the Kenyan market. But prices have moved up after Stanbic merger rumors. At currents price of 80s, the dividend yield is 6%-8%. hopefully their dividend also grow with price.
Explanation: Buying NCBA is like owning a small “business” that pays you 10–13% per year, even if the share price doesn’t move.
Dividends Growth
⚠️ 7. Key Risks to Watch
Even strong banks have risks.
- 🟠 Falling Deposits — Deposits dropped 5.3%. If it continues, lending capacity could tighten.
- 🟠 Rising Costs — Operating expenses rising almost same pace as revenue.
- 🟠 Higher Provisions — Digital lending = higher default risk.
- 🟠 Slow Asset Growth — Conservative approach: safe but not high-growth.
- 🟠 NSE Liquidity — Low trading volume can limit quick exit opportunities.
🟦 8. The Stanbic–NCBA Rumor: Could It Affect the Share Price?
A rumor has circulated that Stanbic Bank may be interested in acquiring NCBA.
- ✔ IF TRUE (even partially): NCBA share price could jump sharply like it has done so far— investors may expect a premium buyout price; market confidence increases.
- ✔ IF FALSE: No damage — NCBA remains strong; share price stays stable; dividends continue.
Most Likely Outcome: Even if a full merger does not happen, strategic collaboration (shared tech, joint financing, or Pan-African expansion) is possible and would be positive.
🎯 9. Final Investment Recommendation
- ⭐ BUY — For long-term and dividend investors (strong profits, safe balance sheet, excellent dividend history, digital lending dominance).
- ⭐ HOLD — If you already own: keep holding, add more during price dips, enjoy reliable dividends.
- ❌ NOT FOR: Short-term traders, high-risk speculators, people looking for sudden price explosions.
NCBA is about steady, calm, reliable wealth building.
NCBA — Dividend History (Interim, Final, Total)
| Year | Interim (KES) | Final (KES) | Total Dividend (KES) |
|---|---|---|---|
| 2025 | 2.50 | 3.25 | 5.75 |
| 2024 | 2.25 | 3.00 | 5.25 |
| 2023 | 1.75 | 2.25 | 4.00 |
| 2022 | 2.00 | 2.25 | 4.25 |
| 2021 | 0.75 | 1.50 | 2.25 |
| 2020 | — | — | 0.00 |
| 2019 | 0.25 | 1.25 | 1.50 |
| 2018 | — | 1.00 | 1.00 |
| 2017 | — | 1.00 | 1.00 |
| 2016 | 0.25 | 1.00 | 1.25 |
| 2015 | 0.25 | 1.00 | 1.25 |
| 2014 | — | 0.75 | 0.75 |
| 2013 | 0.25 | 1.00 | 1.25 |
| 2012 | 0.25 | 0.25 | 0.50 |
| 2011 | 0.25 | 0.25 | 0.50 |
| 2010 | 0.25 | 0.25 | 0.50 |
| 2009 | 0.25 | 0.25 | 0.50 |
| 2008 | 0.25 | 0.80 | 1.05 |
| 2007 | 0.80 | 1.90 | 2.70 |
| 2006 | 0.80 | 1.80 | 2.60 |
NCBA — Bonus Issues
| Year | Bonus Ratio | Announced | Book Closure | Upload | Trading |
|---|---|---|---|---|---|
| 2020 | 1 : 10 | 2020-04-22 | 2020-05-12 | 2020-08-06 | 2020-08-07 |
| 2018 | 1 : 10 | 2018-03-22 | 2018-04-30 | 2018-05-25 | 2018-05-28 |
| 2014 | 1 : 10 | 2014-03-03 | 2014-05-08 | 2014-05-21 | 2014-05-22 |
| 2012 | 1 : 10 | 2012-02-23 | 2012-11-22 | 2012-12-07 | 2012-12-07 |
| 2011 | 1 : 10 | 2011-02-24 | 2011-04-07 | 2011-05-25 | 2011-06-02 |
| 2010 | 1 : 10 | 2010-02-24 | 2010-03-25 | 2010-05-12 | 2010-05-13 |
| 2009 | 1 : 10 | 2009-02-19 | 2009-03-19 | 2009-04-29 | 2009-05-06 |
| 2007 | 2 : 1 | 2007-07-26 | 2007-12-06 | 2007-12-21 | 2008-01-02 |
NCBA — Rights Issues
| Year | Ratio | Price (KES) | Announced | Book Closure | Rights Trading | Upload | Trading |
|---|---|---|---|---|---|---|---|
| 2014 | 1 : 14 | 49.25 | 2014-09-26 | 2014-10-02 | 2014-10-23 to 2014-11-07 | 2014-12-17 | 2014-12-18 |
| 2012 | 1 : 4 | 21.00 | 2012-02-23 | 2012-07-30 | 2012-08-27 to 2012-09-07 | 2012-10-19 | 2012-10-23 |
| 2007 | 1 : 5 | — | 2007-07-26 | 2007-10-02 | 2007-10-18 to 2007-12-10 | 2007-11-22 | 2007-11-22 |
.png)
.png)
.png)
.png)
.png)
.png)
.png)
.png)
.png)
.png)
4 Comments
Thank you for sharing
ReplyDeleteWelcome
DeleteVery insighfukl analysis.
ReplyDeleteWelcome
Delete