The Kenya Commercial Bank (KCB) Group has signed a deal with Atlas Mara that will see KCB take a controlling stake in key banks in the region.
KCB is set to acquire a 62.1% stake in Rwanda’s Banque Populaire du Rwanda (BRP) and 100% stake in Tanzania-based African Banking Corporation (ABC). It will see KCB become the second largest bank in Rwanda by market share.
In Tanzania, KCB plans on merging ABC with KCB Tanzania to rank as a top ten bank.
The deal remains subject to regulatory approval. According to KCB Chief Executive Joshua Oigara, the acquisition is in line with the group’s regional expansion strategy.
Should it be approved, the deal will also take KCB closer to becoming the first bank in Kenya with a Ksh1 trillion asset base.
Q3 results for KCB, published on November 11, showed a 27 per cent growth in total assets expanding its balance sheet to Ksh972 billion.
Equity Bank’s Q3 results, released on November 12, saw its balance sheet expand 38% from Ksh677.1 billion to reach Ksh934 billion as of September 30, 2020.
READ>>>>>KCB Receives Accreditation to Fund Green Projects
The results fueled reports on the race to a Ksh1 trillion balance sheet, with Equity Bank CEO James Mwangi having declared on multiple occasions Equity’s ambition to hit the milestone.
Equity Bank had earlier seen a deal to acquire four subsidiaries of Atlas Mara collapse in June, with the bank citing the shocks of the Covid-19 pandemic while explaining why the deal was shelved.
It would have seen Equity take control of Atlas Mara subsidiaries in Rwanda, Zambia, Mozambique and Tanzania.
KCB’s deal with Atlas Mara will expand the group’s regional footprint, with the bank already operating in six countries.
It has regional units in South Sudan, Uganda, Rwanda, Burundi, Ethiopia and Tanzania.
The group is banking on regional success to fuel growth particularly in the Post-Covid-19 era.
Oigara noted that KCB was intent on positioning itself as a regional leader in the financial services sector while offering innovative products.
“The transaction fits within the Group’s expansion strategy and will see us increase our market share and distribution network across Rwanda and Tanzania and improve our operating leverage by enabling us to deliver our existing product offerings to a wider base of customers while positioning the bank for sustainable growth in the long-term.
“Once the transaction is completed, the Group’s Rwanda and Tanzania businesses are expected to have stronger financial credentials to support business growth in the post covid-19 macroeconomic recovery,” he explained.
