KCB Shareholders taste the fruits of regional expansion
KCB Group shareholders will share a Kes3.2 billion interim dividend after the Bank bagged Kes30.5 billion in profits after tax for the third quarter on a surge of profitability from the new Rwandan acquisition.
The contribution of Group businesses, which excludes KCB Bank Kenya stood at 16.3 per cent (up from 15.2 per cent) driven by new businesses and the impact of Banque Populaire du Rwanda Plc (BPR) Bank.
KCB Group bought the Rwandan bank last year which saw the Kenyan lender triple its regional branch network acquiring 196 outlets.
The new subsidiary made KCB the second largest bank in Rwanda after it merged BPR with its subsidiary KCB Bank Rwanda and renamed the combined entity BPR Bank.
KCB which is eyeing Congolese lender Trust Merchant Bank in a new acquisition that will make the bank one of the largest lenders in East and Central Africa.
The Kes178.5 billion ($1.5 billion) asset bank with a strong retail, SME, corporate and digital banking channels and over 110 branches will boost KCB assets to Kes1.5 trillion making it the largest Kenyan bank by assets ahead of Equity Bank’s Sh1.26 trillion assets.
The Congolese Bank will give KCB exposure to the recently liberalized insurance sector in one of the region’s densely populated countries with 90 million through Afrissur SA as well as access to huge forex holdings given the dollarization of the Congolese economy.
The new buys are set to boost KCB Group revenues, currently raking Kes92 billion in nine months on higher foreign exchange earnings, interest income and lending fees.
“We are seeing strong revenue momentum across the corporate and retail business which positions us to meet our full-year outlook. Our focus has been on delivering value and support to our customers to help them navigate the tough economic environment”, said KCB Group CEO Paul Russo on Tuesday.
The new acquisitions however come at a price with KCB’s operating costs rising 19.6 per cent to Kes41.6 billion compared to Kes.34.8 billion last year.
This was on account of the impact of BPR Bank, increased business activities and increase in staff costs.
This saw the cost-to-income ratio stand at 45.1 per cent even as the Group has put in place cost-saving initiatives targeting savings across all its businesses.
The Kenya lender is exporting its highly digitized model to launch and expand in the region at minimal costs while driving financial inclusion and leveraging its advancement on sustainable business to drive the green agenda in Africa.
KCB Group, which has a presence in six countries and a representative office in Ethiopia, has been keen to tap into new growth opportunities while reinforcing existing market capabilities.
The Group is keenly following the developments in Ethiopia as it seeks to grow its regional footprint.
The Kenya lender is exporting its highly digitized model to launch and expand in the region at minimal costs while driving financial inclusion and leveraging its advancement on sustainable business to drive the green agenda in Africa.
