KCB Eats Equity’s Lunch in DRC With Ksh15B Deal

Kenya Commercial Bank (KCB) is looking to capture a slice of the Democratic Republic of Congo (DRC) banking market with its latest deal – an acquisition of Trust Merchant Bank. The deal is valued at an estimated Ksh15 Billion.

The group has reached a deal to acquire an 85 percent stake in the bank and plans to buy the remaining shares within two years. The DRC would be KCB’s seventh market after Kenya, Rwanda, Burundi, Tanzania, South Sudan and Uganda.

The acquisition gives KCB a foothold in the country with a population of over 94 million. KCB’s biggest local rival, Equity, has so far made the biggest splash in the DRC market. It became the second-largest player in the market with its acquisition of Banque Commerciale du Congo (BCDC). Equity CEO James Mwangi expects DRC to overtake Kenya as the group’s biggest market by 2025.

Trust Merchant Bank is the DRC’s third-largest bank. It is headquartered in the city of Lubumbashi, home to many large mining companies in the country.

Equity in February 2021 unveiled its new brand identity in DRC, Equity BCDC, after the successful merger of  Equity Bank Congo (EBC) and Banque Commerciale du Congo (BCDC). Among other activities, Equity has been leading trade missions to facilitate investment by Kenyan businesses in DRC.

DRC, which joined the East African Community (EAC) earlier in 2022, is rich in mineral resources and is witnessing increased growth driven by burgeoning investments. Economic growth in DRC rebounded to 5.7% in 2021 after a pandemic-induced decline to 1.7% in 2020.

Financial inclusion rates in the DRC have been growing – driven largely by the uptake of mobile money. Data from the World Bank’s Global Findex database indicates that the share of adults with an account in the country (including a mobile money account) rose from 26% in 2017 to 47% in 2021. Mobile banking offerings among other innovations are key in the strategies of firms eyeing the market today.

Former KCB Bank CEO Joshua Oigara had in March confirmed discussions on the company’s entry into DRC.

“We do have some investment projects that we are looking at [including] the consolidation of the bank in Rwanda and we also have conversation today about our potential entry into DRC,” he stated.

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