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KCB Group seeks to buy banks in Rwanda, DRC

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KCB Group Chief Executive Officer Joshua Oigara.
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KCB Group plans to further expand in the Great Lakes Region by buying banks in Rwanda and Democratic Republic of the Congo (DRC)

Reuters news agency quotes CEO Joshua Oigara as stating that Kenya’s biggest bank by assets is also planning to open a representative office in China, to take advantage of growing trade links between East Africa and the Asian giant.

Speaking to reporters on Friday, he, however, did not reveal the targeted banks or the timeframe within which the deals will be actualised.

The move comes days after Equity Bank, Kenya’s leading bank in terms of market capitalisation and customer numbers, announced that it had entered into an agreement with Pan-Africa focused banking group Atlas Mara to acquire the latter’s banking operations in four African countries.

The transaction, which will be done through a share swap, will see Equity Bank acquire 62% of share of Banque Populaire du Rwanda Limited, 100% of African Banking Corporation (ABC ) in Zambia, Tanzania and Mozambique.

Equity Bank expects to allot about 252.5 million new ordinary shares that represent about 6.27% of Equity’s issued shares equivalent to Ksh 10.7 Billion.

The aggregate consideration ultimately payable will be that set out in the definitive agreements negotiated following confirmatory due diligence, and may be subject to adjustment (positive or negative), based on the performance of the banks through consummation of the transactions, and on the net asset value of the banks at the time of closing relative to the net asset value they reported as at 31 December 2018. Further, actual aggregate consideration could include an additional conditional deferred amount.

Kenyan lenders have in recent months unveiled several deals since the government capped commercial lending rates in 2016, crimping their profit margins and forcing them to look for survival strategies, including consolidation.

Last month, KCB offered to buy National Bank of Kenya (NBK) in a swap of one KCB share for 10 NBK shares in a deal seen helping NBK out of its perennial liquidity challenges.

Commercial Bank of Africa (CBA) Group is also  in the process of merging with NIC Bank to form the third biggest bank by assets in East Africa.

Read: Kenya poised for crucial strategic talks with US

Smaller transactions have included Diamond Trust Bank’s acquisition of Habib Bank Kenya in 2017.

Written by
BT Reporter -

editor [at] businesstoday.co.ke

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