By BERNA NAMATA

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KCB Group is banking on its new subsidiary BPR Bank Plc Rwanda to more than double its regional business in the next two years and support economic expansion in the East African country.

KCB said scaling its regional business was critical for the future, adding that it will bolster its investments in Rwanda. The lender is currently eyeing the newest member of the East African Community – the Democratic Republic of Congo. 

Read: Rwanda, DRC most profitable units for KCB, Equity banks

This, said KCB Group CEO Joshua Oigara, will also see the bank invest significantly to support the key economic sectors like housing, agriculture, and hospitality.

The lender merged KCB Bank Rwanda with its newly acquired Banque Populaire du Rwanda (BPR) to form BPR Bank Rwanda Plc last month.

Read: KCB eyes total buyout of Rwandan lender

“We are delighted with the possibilities that lay ahead, as this integration has enabled us to buttress our leadership position, giving us a stronger edge to play a bigger role in driving the financial inclusion agenda in East Africa, while building a robust and financially sustainable organisation,” said Mr Oigara during the unveiling of BPR Bank in Kigali on Wednesday.

BPR is now the second-largest lender in Rwanda, following the merger, giving KCB a stronger edge in deepening its corporate and retail banking in the country.

“We want to revolutionise the way we do business, guaranteeing ultimate satisfaction to our esteemed customers, as they interact with us,” Mr Oigara added.

Single currency

Central Bank of Kenya Governor Dr Patrick Njoroge said central banks across the region are in the process of harmonising critical policies to facilitate the attainment of a single currency by 2024.

This process, he said, is ongoing and will lead to convergence of regulatory frameworks across the region with a view to reducing transaction costs and allowing seamless transactions across the region.

“As a Central Bank, our vision is to build an industry that works for all East Africans. As such, the new entity BPR Rwanda is a step in the right direction,” he said.

He challenged regional banks to commit more resources to the regional integration agenda which has huge financing needs.

“A lot more needs to be done to meet financing needs in the region such as infrastructure, manufacturing, and greening our economy. This can only be enhanced by integration (financial) and consolidation…” Dr Njoroge said.

BPR Bank will have a range of debit and credit cards to simplify payments for its customers, a service it launched in Kigali on Wednesday.   

Banking sector

BPR Bank Rwanda has an asset base of Rwf648 billion ($632 million) and a network of 154 branches, after Bank of Kigali, the biggest local bank.

Figures by the National Bank of Rwanda (BNR), the country’s central bank, show the banking sector remains profitable with earnings increasing by 53.6 percent to Rwf125.5 billion ($122 million) in 2021.

The banking sector assets grew by 17.5 percent to Rwf5,064 billion ($4.9 billion) last year, mainly driven by the growth of deposits, capital injections, and profits.

The country’s financial sector, however, remains highly concentrated as banks account for about 67.2 percent of total financial services assets, according to figures by the central bank.

Foreign-owned banks in Rwanda hold 46.7 percent of total banking sector assets.  

Analysts say the merger will stimulate stiff competition in Rwanda’s banking sector as the existing banks fight to retain and expand their market share.

“We are excited to see this milestone come through. These two organisations have the right synergies to come together and succeed, especially in this market where there is a need to provide various products and services to our young population to foster not only economic development but also improve quality of life for the population,” said Dr Édouard Ngirente, Rwanda Prime Minister, while officiating the event.

KCB has subsidiaries in Tanzania, South Sudan, Uganda, Rwanda, and Burundi as well as a representative office in Ethiopia.

KCB Group’s net profit for 2021 jumped 74 percent to Ksh34.2 billion ($300 million) from Ksh19.6 billion ($171.92 million) in 2020, driven by higher revenues from trading operations and by over 50 percent reduction in loan loss provisions.

The KCB subsidiaries, including the National Bank of Kenya which was acquired by KCB in 2019, doubled their total contribution to the Group’s net profit to $47.32 million from $24.1 million, for the full year ending December 31, 2021.