Customers in a KCB banking hall in South Sudan capital, Juba. The lender cut its presence in the war-torn State. FILE PHOTO | NMG KCB started operations in the country in 2006, Equity in 2009 and Co-operative Bank was the latest entrant in 2013.
In 2014, KCB shut three branches in South Sudan after the war broke out while in 2017, Equity Bank followed suit and closed seven out of its 12 branches in the country.
The civil war, which started in 2013 and ended in 2020, led to a massive write-down of assets, loss of revenue and hyperinflation, which resulted in banks reporting monetary losses due to reassessment of assets and liabilities.
Kenyan top retail banks are struggling to navigate the rough terrain in the war-ravaged South Sudan with Co-operative bank falling to an accumulated loss of Ksh3.29 billion ($28.85 million) in the last eight years of operation.
A review of the audited financial statements for KCB, Equity and Co-operative bank show that the latter has made losses amounting to about $28.85 million from the year 2014 to 2021, translating to a loss of Ksh411.78 million ($3.61 million) per annum.
The only profit for the lender which started operations in South Sudan in September 2013 came in the year 2015 at Ksh849.72 million ($7.45 million).
The lender exported its cooperative banking model in South Sudan by investing Ksh2.72 billion ($23.85 million) for a 51 percent shareholding in a joint venture with the Government of South Sudan.
The government of South Sudan holds 49 percent shareholding in the bank on behalf of the country’s cooperative moment.
Last year, Co-op Bank extended this joint venture by three years, arguing that the transfer of the minority stake to the South Sudanese Cooperative movement has been delayed by economic and political challenges in the country.
The civil war, which started in 2013 and ended in 2020, led to a massive write-down of assets, loss of revenue and hyperinflation, which resulted in banks reporting monetary losses due to reassessment of assets and liabilities.
Equity Group Holdings (EGH) Ltd recorded an estimated Ksh1.86 billion($16.31 million) in net profit during the period under review translating to about Ksh206.77 million ($1.81 million) per annum, with losses coming in the year 2016 and 2021 at Ksh660 million ($5.78 million) and Ksh200 million($1.75 million) respectively. Oil export drought On the other hand, KCB’s subsidiary in South Sudan returned a total profit after tax of Ksh6.03 […]
