May 28, 2022

Mawazo Writing Africa

Writing about the main

KCB opens new subsidiary in Rwanda after merger

The KCB Group is counting on its new subsidiary BPR Bank Plc Rwanda to more than double its regional business over the next two years and support economic expansion in the East African country.

KCB announced , scaling its regional business was crucial going forward, adding that it will increase its investments in Rwanda. The lender is currently eyeing the newest member of the East African Community – the Democratic Republic of the Congo.

Read:Rwanda, DRC, the most profitable entities for KCB, equity banks

This, said Joshua Oigara, CEO of KCB Group, will also see the bank invest significantly to support key economic sectors such as housing, agriculture and hospitality.

The lender has KCB Bank Rwanda merged with its new acquired Banque Populaire du Rwanda (BPR) last month to form BPR Bank Rwanda Plc.

Read:KCB is considering a full takeover of the Rwandan Lenders

“This is us. We are excited about the opportunities ahead as this integration has allowed us to strengthen our leadership position and has given us a stronger head start to play a greater role in advancing.” the Agenda for Financial Inclusion in East Africa a while building a robust and financially sustainable organization,” Mr. Oigara said during the unveiling of BPR Bank in Kigali on Wednesday.

BPR is now the second largest lender in Kigali Rwanda will provide to KCB after the merger a stronger advantage in deepening their corporate and retail business in the country.

“We aim to revolutionize the way we do business and guarantee our valued customers the highest level of satisfaction when interacting with us,” added Mr. Oigara

Single Currency

The Governor of the Central Bank of Kenya, Dr. Patrick Njoroge said central banks across the region are in the process of harmonizing key policies to help achieve a single currency by 2024.

That process, he said, is underway and will lead to regulatory convergence frameworks across the region to reduce transaction costs and enable seamless transactions across the region.

“As a central bank, our vision is to build an industry that works for all East Africans. Therefore, the new entity BPR Rwanda is a step in the right direction,” he said.

He called on the regional banks to allocate more resources to the regional integration agenda, which has huge funding needs.

< p>“Much more needs to be done to meet the financing needs in the region such as infrastructure, manufacturing and greening of our economy. This can only be improved through integration (financial) and consolidation…” said Dr. Njoroge.

BPR Bank will offer a range of debit and credit cards to simplify payments for its customers, a service it launched in Kigali Wednesday.

Banking sector

BPR Bank Rwanda has an asset base of Rs.648 billion (US$632 million) and a network of 154 branches, after Bank of Kigali, the largest local bank.

Figures from the National Bank of Rwanda (BNR), the country’s central bank, show that the banking sector remains profitable, with revenues rising 53.6% to Rwanda 125.5 billion ($122 million) in 2021.

Banking sector assets grew 17.5 percent last year to 5,064 billion rupees (US$4.9 billion), mainly driven by growth in deposits, capital injections and profits.

However, the country’s financial sector remains highly concentrated, with banks accounting for about 67.2% of total assets in financial services, according to central bank figures

Foreign-owned banks in Rwanda hold 46.7% of the banking sector’s total assets.

< p>Analysts say the merger will stimulate fierce competition in Rwanda’s banking sector as the existing banks are struggling to maintain and expand their market shares.

“ We are pleased that this milestone has been reached. These two organizations have the right synergies to come together and succeed, especially in this market where it is necessary to offer our young population different products and services in order not only to promote economic development but also to improve the quality of life of the population improve,” he told Dr. Édouard Ngirente, Prime Minister of Rwanda, while chairing the event.

KCB has offices in Tanzania, South Sudan, Uganda, Rwanda and Burundi, and a representative office in Ethiopia.

KCB’s net profit Group’s 2021 revenue increased 74 percent to Ksh34.2 billion (US$300 million) from Ksh19.6 billion (US$171.92 million) in 2020, reflecting higher trading revenue and an over 50- percent reduction in loan loss provisions.

KCB’s subsidiaries, including National Bank of Kenya, which was acquired by KCB in 2019, doubled their total contribution to the group’s net income from US$24.1 million to US$47 $.32 million for the full year ended December 31, 2021.