KCB Group, Kenya’s biggest lender by assets announced that it plans to buy a bank in Rwanda and another in Kenya. This was made known by the CEO of the bank, Joshua Oigara on Friday while speaking to journalists.
According to Reuters, the CEO did not reveal the names of the banks the lender will be acquiring or the time frame. KCB is also planning to open a representative office in China, to take advantage of growing trade links between East Africa and China.
Since the Kenyan government capped commercial lending rate in 2016, the profits of Kenyan banks have continuously dwindled that they are forced to look for ways to survive such as consolidation.
Last week, the second largest bank in Kenya by assets, Equity Group, announced that it was in talks with London-listed financial services firm Atlas Mara Limited with regards to acquiring stakes in banks in Rwanda, Zambia, Mozambique and Tanzania. In response to the news, Christos Theofilou, Vice President – Senior Analyst at Moody’s Investor Service said that the deal between Equity Bank Kenya’s holding company and Atlas Mara will build on their strengths, a credit positive for both. Equity Group will bolster its position in Rwanda and Tanzania, and enter Mozambique and Zambia. Atlas Mara will benefit from a stake in Equity Group and can focus on its larger core markets.
KCB last month also offered to buy 100 percent of National Bank of Kenya (NBK) in a share swap of one KCB share for 10 NBK shares the biggest bank merger in Kenyan history.
In 2016, Kenya’s Fidelity Commercial Bank was auctioned at Sh100 by SBM Holdings of Mauritius in a deal requiring the new owner to inject Sh2 billion ($19.8 million) into the bank.
Diamond Trust Bank in 2017 acquired Habib Bank Kenya after its 61 years of its existence.