KCB Group assets edge closer to Sh1.5 trillion on acquisition of DRC-based bank
KCB Group journey to Kes1.5 trillion assets lender has received a major boost after the regional lender received key regulatory nod enabling the completion of the transaction to acquire Trust Merchant Bank SA (TMB).
The Group now owns 85 percent stake in the Democratic Republic of Congo (DRC) based lender, which adds about Kes209 billion to the regional lender’s assets.
In the nine months ended September, KCB Group total assets increased by 13.7 percent to close the period at Kes1.28 billion.
KCB Group obtained the regulatory green light in Kenya, the DRC and the COMESA Competition Commission, setting the stage for the Group to acquire the majority stake in TMB.
Early August, KCB Group announced the proposed acquisition of an 85 percent shareholding in the Trust Merchant Bank SA of DRC, with an option for a full takeover in two years.
KCB Group CEO Paul Russo said the transaction will positively contribute towards KCB’s increased scale of operations by establishing its presence in new markets and providing income diversification from a geographical perspective.
Further, the deal will enable KCB to accelerate its market presence in the DRC in the near term by leveraging on TMB’s 18-year operational history, vast branch network, valuable local customer relationships and deep knowledge of local business dynamics.
In addition to the core banking business of TMB, the existence of an insurance subsidiary Afrissur SA will provide opportunity for KCB to diversify its offerings in DRC’s insurance sector.
This transaction will provide KCB a strategic foundation to capitalize on cross-border trade from the Indian to the Atlantic Oceans, the bank said.
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“We have found a partner with a proven and trusted history of serving and supporting customers, businesses, and communities. Combining our common legacies and our complementary footprints will strengthen our ability to serve our communities and regional customers and provide solutions that make a difference in people’s lives. The acquisition extends our reach by providing customers access to a larger banking network and an expanded array of services. Our shared banking philosophies will provide significant long-term value for our shareholders, employees, and customers. I am incredibly excited about this opportunity and look forward to welcoming new customers and team members to the KCB family,” said Mr Russo.
KCB Group will operate TMB with its current brand and will enhance the current business operating model with the capabilities KCB has built over time in systems and processes. This will build on the strengths of TMB and enable TMB to deliver significant incremental value by being part of KCB.
“We see significant business opportunities from this acquisition arising from delivering innovative financial services to customers, growing linkages between customers in our region and realizing operational efficiencies which will deliver tangible value to key stakeholders” said Mr Russo.
In the nine months ending September 2022, KCB Group net profit increased by 21.4 percent to Kes30.6 billion on the back of sustained growth from both net interest and non-funded income lines. This was a jump from Kes25.2 billion reported for the same period last year.
TMB is one of DRC’s largest banks, with US$1.7 billion in total assets and a strong offering in retail, SME, corporate and digital banking channels.
TMB’s bank branch network of 109 outlets is supported by a substantial agency banking network, alongside a representative office in Belgium. In the DRC, the bank commands an 11 percent market share as measured by total assets and is home to more than one in five banks accounts in the country.
