Nov 29, 2022

Mawazo Writing Africa

Writing about the main

Kenyan banks lead regional peers with 150 new branches

KCB Group’s acquisition of the Rwandan bank has extended Kenya’s dominance in the East African financial market, with a 44 percent increase in bank branches to 494 locations over the past year.

Data from the Central Bank of Kenya ( CBK) show Kenyan bank branches in the region rose from 343 after KCB acquired Rwandan lender Banque Populaire du Rwanda (BPR) from London-listed financial services firm Atlas Mara Limited.

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KCB Bank tripled its regional branch network to 196 branches last year, and I&M Bank also increased its regional presence to 35 from 22 last year branches, while Equity Bank opened two new branches in 148 regional locations.

NCBA and Diamond Trust Bank each closed one branch, while Guaranty Trust Bank, Co-Operative Bank and ABC Ba nk kept their current locations.

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“This led registered a 44 percent increase in the total number of branches of Kenyan banking subsidiaries in the EAC partner countries (East African Community) and the DRC (Democratic Republic of the Congo) from 343 branches in December 31 December 2020 to 494 as of December 31, 2021,” said the CBK in the 2021 Regulatory Report.

“Growth was mainly due to the acquisition of BPR in Rwanda by KCB Group Rwanda Plc.”

The high level of financial inclusion and digital banking has Forced Kenyan lenders to seek growth outside of local markets. The CBK data shows that the Kenyan lenders who have expanded overseas are conducting businesses with combined assets of Shillings 1.2 trillion in the region.

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Banks lent Ksh 510.3 billion (US$4.3 billion) and cut Ksh 17.23 billion (US$147.1 million) in profits from East African affiliates.

Kenyan lenders now employ 8,712 East Africans in its affiliates.

KCB’s expansion in Rwanda makes the country the leading location for Kenyan lenders with 197 branches, overtaking Uganda, which has traditionally dominated with 119 bank branches. Tanzania follows with 76 branches, Democratic Republic of the Congo with 70, South Sudan with 22 and Burundi with 10 branches.

The push for bank acquisitions has seen KCB compete with Equity Bank Group for regional dominance struggling to rebound has its wealth base at more than Ksh 1 trillion ($8.5 billion).

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KCB Bank and Equity Group were top Competitors, each vying for a superior customer base and assets to increase market share, sent them on a regional acquisition spree.

The KCB deal came months after Equity Group abandoned its plan to acquire four subsidiary banks of Atlas Mara Limited in order to raise their capital of the Covid-19 pandemic.

The parties had started talks in 2020, but negotiations dragged on until the outbreak of the pandemic.