KCB plans to buy out minority shareholders in Rwanda unit
Friday November 19 2021
KCB Group plans to acquire the 24 percent stake owned by minority investors in its Rwandan subsidiary Banque Populaire du Rwanda Plc (BPR) next year.
The Kenyan banking multinational recently bought a 62 percent stake from London-based Atlas Mara Limited and another 14 percent from private equity firm Arise, bringing its ownership in BPR to 76 percent.
“Our ambition is to acquire the remaining 24 percent in the next year. We are still keen to acquire 100 percent of BPR,” KCB’s chief executive Joshua Oigara told Business Daily.
“The offer is still running. We gave them the offer after Atlas Mara. We are still waiting.”
A full buyout of BPR will cost KCB an estimated Sh6.4 billion, if the minority investors are offered the same terms as Atlas Mara which was paid $33 million (Ksh3.7 billion) for its 62 percent stake.
Atlas Mara will get an additional $2.8 million (Ksh314 million) which has been deferred.
KCB is also waiting to buy BancABC Tanzania from Atlas Mara.
“In Tanzania we are waiting for final feedback. It has delayed a lot,” Mr Oigara said.
“It has taken us a year since we announced in November last year. We should be able to have a view on Tanzania by the end of this year.”
Atlas Mara is selling its African banks to KCB and other lenders to raise funds to pay its creditors, some of whom had launched liquidation proceedings against the multinational that was the brainchild of former Barclays Plc’s chief executive Bob Diamond.
Besides the acquisitions in Rwanda and Tanzania, KCB is also interested in acquiring a bank in the Democratic Republic of Congo (DRC) where foreign exchange trades are a major source of revenue for lenders.
KCB says the acquisitions reflect its strategy of expanding its operations in the regional market. Big banks led by Equity, KCB, I&M and DTB have been deepening and expanding their presence in the region in pursuit of growth and diversification.
Uptake of financial services in the neighbouring countries are lower than Kenya, signalling future growth opportunities.
The ability to offer seamless services to clients across multiple markets is also seen as advantage in attracting and retaining multinationals.
The international subsidiaries contributed 10.8 percent of KCB’s Ksh25.1 billion ($222.9 million) net income in the nine months ended September.
KCB plans to merge BPR and BancABC Tanzania with the subsidiaries it has been running in those markets, building scale and enhancing efficiencies.