KCB Group kicked off a plan to enter the Democratic Republic of Congo through the acquisition of an existing lender in the next four months. This is part of the bank’s pan-African expansion plan as the scramble for the mineral-rich country by East African lenders takes shape.
Group chief executive Joshua Oigara told The EastAfrican that the regional lender — with more than Ksh1 trillion ($9.17 billion) worth of assets — is in negotiations with “two to three banks” in the DR Congo, as it looks to settle in Kinshasa by the end of the year.
“That is our key focus for the second half of this year. We are looking at two to three potential opportunities in that market. They look exciting,” Mr Oigara told The EastAfrican.
In 2020, KCB, which is listed on the Nairobi Securities Exchange, suspended its cross-border expansion plan due to the Covid-19 crisis. Mr Oigara’s other focus is Ethiopia. “Ethiopia is on the way so I don’t have comment on that for now. We are just waiting,” he said.
KCB has operations in Kenya, Uganda, Tanzania, Rwanda, Burundi and South Sudan and a representative office in Ethiopia.
In November 2020, KCB strengthened its business in Rwanda and Tanzania by acquiring Banque Populaire du Rwanda Plc (BPR) and African Banking Corporation Tanzania (BancABC) respectively owned by the British financial services conglomerate Atlas Mara Ltd. Under the deal, KCB acquired a 62.06 percent stake in BPR and a 100 percent stake in BancABC.
“In line with the Group’s strategy and specifically to scale our regional presence, the Group is at the tail end of acquiring a majority stake in BPR and BancABC Tanzania in Rwanda and Tanzania respectively,” said Mr Oigara adding, “This transaction will bolster the Group’s market share in these two key markets and grow the contribution of international businesses to the Group.”
KCB Group is expected to double its market share and become the second-largest lender in Rwanda upon acquisition of BPR and among top 10 banks in Tanzania after the acquisition of BancABC.
In 2019, KCB acquired the state-owned National Bank of Kenya and took over the good assets of Imperial Bank, which was put under receivership by the central bank on October 13, 2015, owing to financial mismanagement and fraud by its directors.
“We are still a medium-sized institution across the continent and we are relatively a small bank globally. If you look at the global ranking, we are not in the top 500 banks in the world. The sky is the limit,” Mr Oigara told The EastAfrican last year.
DR Congo, with a population of about 85 million people, has attracted the attention of other regional banks such as Equity Bank and Tanzania’s largest lender by assets CRDB Bank Plc.
Last year, CRDB resumed its cross-border expansion plan which had been put on ice for more than three years, with DR Congo being top on its radar through Greenfield Investments.