[vc_row][vc_column][vc_column_text]KCB Group is looking at medium-sized lenders to buy as part of an expansion plan and is building up capital to boost its acquisition war chest, its CEO said today. With 43 commercial banks, executives say, Kenya’s banking industry is ripe for consolidation that will create fewer bigger institutions able to write bigger loans for the growing economy.
“We will look for businesses where there can be synergy, where there can be ability for us to scale up, so medium-sized banks will be areas that we are focusing on today,” KCB CEO Joshua Oigara told Reuters in an interview.
KCB, the country’s biggest bank by assets, said on Friday plans to sign up a transaction adviser to raise the bank’s capital before the end of this month, he said, although he did not say how much the bank was seeking. KCB’s total capital stood at 79 billion shillings ($779.48 million) at the end of last year.
“That scaling up of capital is actually part of the preparation for that (potential acquisition),” he said, adding that he was interested in Kenyan lenders.
But he said KCB was not looking at any parts of Barclays Africa Group that could come up in the wake of Barclays Plc’s decision to reduce its stake. Kenya’s Equity Bank had said earlier this week that it could be interested in some Barclays assets.
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Mr Oigara said KCB expected strong growth in its Tanzania and Rwanda businesses, helping offset the impact of a downturn facing its unit in conflict-torn South Sudan, which contributes 8 percent of the group’s annual revenue. Authorities in South Sudan, whose economy has been ravaged by fighting since December 2013, abandoned its fixed exchange rate in December and floated the pound, leading to a big devaluation and putting pressure on KCB’s balance sheet.
“For this year our plan is that Kenya, Uganda, Rwanda and Tanzania will actually deliver a growth that will compensate the challenges we see in South Sudan,” Mr Oigara said.
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