KCB Group Plc (KCB) and Atlas Mara (ATMA) have signed a definitive agreement which will see East Africa’s biggest bank by assets increase its footprint within the region.
The Proposed transaction will see KCB acquire Banque Populaire du Rwanda Plc (BPR) and African Banking Corporation Tanzania (BancABC).
KCB Group CEO and MD Joshua Oigara said the transaction was part of KCB’s ongoing strategy to explore opportunities for new growth while investing in and maximizing returns from the Group’s existing businesses.
The acquisition, he added, will buttress the Group’s leadership position and give it a stronger edge to play a bigger role in driving the financial inclusion agenda in the East African region while building a robust and financially sustainable organization.
“The transaction fits within the Group’s expansion strategy and will see us increase our market share and distribution network across Rwanda and Tanzania and improve our operating leverage by enabling us to deliver our existing product offerings to a wider base of customers while positioning the bank for sustainable growth in the long-term, ” said the CEO Oigara.
“Once the transaction is completed, the Group’s Rwanda and Tanzania businesses are expected to have stronger financial credentials to support business growth in the post-covid-19 macroeconomic recovery” he added.
The acquisition will take 62 per cent stake in Banque Populaire du Rwanda Plc (BPR) and a 100 per cent stake in African Banking Corporation Tanzania Limited (BancABC) from ATMA in Rwanda and Tanzania, respectively.
Upon completion of the acquisition in Rwanda, KCB Group business is expected to see KCB double its market share to become the second-largest bank in the country and solidify KCB Group’s leadership position.
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.
“Our growth strategy is premised on both organic and inorganic plans and we shall continue to seek opportunities that increase our shareholder’s value,” said Oigara.
KCB Group Plc after-tax profits for the nine months ending September 2020 stood at KShs.10.9 billion. The Group’s balance sheet expanded 27% to KShs.972 billion, funded by customer deposits growth and acquisition of NBK.
Net loans and advances grew 19% to close the period at KSh. 577.5 billion while customer deposits were up 32% to KSh. 772.7 billion.
By Christabel Airo