KCB Group is pursuing an undisclosed bank in Democratic Republic of Congo to set a foothold on the Central African country.
The deal, the bank said, will push the regional lender’s assets towards the Ksh1.5 trillion ($13.15 billion) mark in the next financial year.
Chief executive Joshua Oigara told The EastAfrican that negotiations for a potential buyout are at an advanced stage and the deal should be completed in the next quarter.
KCB’s assets amount to Ksh1.13 trillion ($9.91 billion) and the lender listed on the Nairobi Securities Exchange (NSE) is keen on establishing a foothold in the mineral rich Central African nation, spreading its operations to seven countries: Kenya, Uganda, Tanzania, Rwanda, Burundi, South Sudan and DRC. It also runs a representative office in Ethiopia.
“We are in discussions in our markets and are focused on a key market, DRC, and that remains our key priority in the coming quarter (April-June),” Oigara told The EastAfrican. “The negotiations have taken a bit longer, largely because of the December holidays, when people were stuck on annual audits and financial statements,” he added.
The Group’s net profit for 2021 jumped 74 percent to Ksh34.2 billion ($300 million) from Ksh19.6 billion ($171.92 million) in the previous year (2020) buoyed by increased revenues from trading operations and by over 50 percent reduction in loan loss provisions.
Regional subsidiaries’ contributions to the earnings increased to 13.7 percent from 13.6 percent during the period under review. Tanzania contributed $6.33 million, South Sudan ($8.03) million, Uganda ($2.36 million), Rwanda ($9.56 million) and Burundi ($4.54 million).
“The benefits of our regional expansion continue to positively contribute to the KCB’s performance.
In 2022, KCB will continue exploring and pursuing attractive regional expansion opportunities to enhance our regional participation, accelerate growth, and maintain sustainable long-term performance,” said Oigara. The bank’s directors have recommended a final dividend of Ksh2 ($0.01) per share, bringing the total dividend for 2021 to Ksh3 ($0.02) after an interim dividend of Ksh1 ($0.008) was paid out in January.
KCB’s stock on the Nairobi bourse, however, shed one percent of its value to Ksh44.60 ($0.391) per share on Thursday (March 17) from the previous days Ksh45.05 ($0.395) per share
According to the Group’s audited financial statements, total revenues increased by 13.5 percent to Ksh108.6 billion ($952.63 million) while total costs went up 12 percent to Ksh47.8 billion ($419.29 million). The group reduced its loan loss provisions by 52 percent to Ksh13 billion ($114.03 million) from Ksh27.2 billion ($238.59 million).
Its assets increased by 15.4 percent to Ksh1.13 trillion ($9.91 billion) buoyed by the acquisition of the Banque Populaire du Rwanda Plc (BPR) while customer deposits grew by 9.1 percent to Ksh837.1 billion ($7.34 billion).
“We know how to become the largest bank. We want to grow big this year, that is the ambition we have .We have an ambition to grow our balance sheet to Ksh1.5 trillion ($13.15 billion) which is the key ambition for us this year. We believe we will be the most efficient institution in terms of efficiency today and international businesses will contribute 20 percent of our business this year,” said Oigara.