(Bloomberg) — Kenya-based NCBA Group is negotiating with a Ghanaian lender with the aim of agreeing on a partnership to expand in the west African market, according to Chief Executive Officer John Gachora.
“We’re actually looking into having something this year,” Gachora said in an interview on Thursday, without identifying the company. “We are working with a local bank, and hopefully we should be launching something there soon.”
NCBA already has operations in Ivory Coast, where it provides mobile micro-loan and savings services in partnership with a unit of MTN Group, Gachora said in the Kenyan capital, Nairobi. The bank has subsidiaries in Tanzania, Uganda and Rwanda.
The lender is also weighing entry into Nigeria but is wary of rivals and regulatory challenges. Africa’s most populous nation “has been a fintech Savannah for quite some time, so whereas we have talked to a lot of partners there, we think it is a very competitive market and you need to have deep pockets before you go into Nigeria,” he said.
The bank is also scouting for opportunities in the Democratic Republic of Congo and is looking at expanding into Ethiopia once it fully opens up its financial services to foreign investors, according to Gachora. It would like to offer its mobile banking channels in new markets, including Mshwari, which enables borrowing and savings on a mobile-phone platform, and its overdraft lending product known as Fuliza.
Homegrown Kenyan lenders, including Equity Group Holdings Plc and KCB Group Plc, are extending their reach on the continent, where masses of people still don’t have adequate access to financial services.
NCBA Group FY Net Income KES10.22B Vs. KES4.57B Y/y
NCBA more than doubled net income to 10.2 billion shillings ($89 million) in the 12 months ending December as investments in government securities increased net interest income by 20.9% to 20.3 billion shillings.
The bank plans to increase its lending this year and lower its non-performing loans ratio from 15.6%, chief finance and strategy officer, David Abwoga, said at a briefing on Thursday.
NCBA’s shares rose 1.6% to close at 25.50 shillings in Nairobi, according to data compiled by Bloomberg. “The stock remains a prime candidate for an upward re-rating subject to a detailed valuation update,” Nairobi-based Standard Investment Bank said in an emailed note.
(Updates with chief executive officer’s comments throughout)©2022 Bloomberg L.P.
