The Commercial Bank of Africa (CBA) has spent nearly $10 million on acquisition of the Rwandan subsidiary of Uganda’s Crane Bank.
The Kenyan lender launched its Rwanda operations on Monday, revealing that it spent $9.5 million to operationalise the new unit.
The tier two bank, which is associated with President Uhuru Kenyatta's family, gained a foothold in Rwanda by taking over of branches belonging to the fallen Uganda lender.
CBA’s significant investment in Rwanda includes the undisclosed purchase price, regulator fees as well as the cost of setting up a new branch at Kigali Heights shopping complex and refurbishing two others that belonged to Crane Bank.
“So far we have invested at least $9.5 million in Rwanda and expect to grow this over time as we expand our business in the country,” CBA Group chairman Desterio Oyatsi said Monday night in Rwanda.
CBA outbid rivals to purchase the Crane Bank Rwanda branches that had been taken over by Dfcu Bank, another Ugandan lender.
The Bank of Uganda in October 2016 took over the management of Crane Bank — at the time the country’s fourth-largest — due to under-capitalisation and sold it to Dfcu.
CBA’s acquisition of Dfcu Bank’s assets in Rwanda, which was completed last month, saved the Kenyan lender from the lengthy process of starting a greenfield operation as a commercial bank.
The lender’s expansion to Rwanda, where it has a staff of 35, brings to five the number of countries where it has a physical banking presence. CBA also operates 33 branches in Kenya, 11 in Tanzania and two in Uganda.
CBA first entered Rwanda in 2016 when it launched MoCash, the equivalent of its highly successful mobile banking service M-Shwari using a microfinance licence.
CBA is also targeting to expand to Mozambique, DRC and Ethiopia through an online presence.
Regional expansion is becoming important as the East Africa Community (EAC) common market continues to take shape, opening the way for free movement of labour and trade of over 130 million people.
“This investment in Rwanda is a key pillar in the implementation of our group’s vision to be a respected and significant financial services business partner in Africa,” said Mr Oyatsi.