KCB Group #ticker:KCB wants to acquire a bank in Democratic Republic of Congo (DRC) in the next two years once it wraps up Sh4.37 billion ($40 million) deals in Tanzania and Rwanda.
Entrance into the Central African country with a population of over 84 million will mark the seventh market outside Kenya for KCB.
Group CEO Joshua Oigara says the lender is not going to “hold pause” on searching for new opportunities and believes DRC is the most likely next destination.
“We are still very keen to grow business into DRC and that is what we will be looking at in the next two years,” said Mr Oigara.
“We are not holding pause. We will continue. We will keep looking at transactions that fit within the group’s expansion strategy.”
DR Congo is one of the biggest countries on the continent by land mass and has more than 80 million people, making it appealing to ambitious lenders looking for growth in the continent.
KCB last week announced that it will acquire 62.06 percent stake in BPR and 100 percent stake in BancABC from London-based Atlas Mara Limited at $32 million and $8 million respectively.
KCB entry into DRC will bring competition at the door step of its rival, Equity Group #ticker:EQTY, which in August purchased a 66.5 percent stake in Banque Commerciale Du Congo (BCDC) through a Sh10.3 billion cash transaction.
Kenyan commercial banks are looking beyond their borders for acquisitions, seeking to tap opportunities in East Africa which are driven by rapid economic growth and trade integration.
Mr Oigara says he targets to increase the share of KCB subsidiaries in total income to at least 25 percent in the next two years from the current under 10 percent.
KCB net profits from its subsidiaries grew by Sh160 million or 9.8 percent from Sh1.63 billion to Sh1.79 billion at the end of last year.The subsidiaries’ net profit earned last year was equivalent to 7.3 percent of the total Sh24.5 billion net profit earned by the group.This was a rise from 6.78 percent of the Sh24.04 billion subsidiaries accounted for in 2018.Rwanda and Tanzania have been the most profitable of KCB subsidiaries, having posted Sh763 million and Sh683 million net profit respectively last year.South Sudan returned Sh560 net profit while that of Burundi posted Sh270 million net profit. Only Uganda was in loss (Sh487 million).