The proposed transaction will see Kenya’s biggest lender by assets acquire Banque Populaire du Rwanda Plc (BPR) and the African Banking Corporation Tanzania (BancABC).
The transaction is subject to obtaining shareholder and regulatory approvals in Rwanda and Tanzania.
KCB Group has signed a deal with London-listed financial services firm Atlas Mara Limited to buy stakes in it's banking units in Rwanda and Tanzania, its chief executive Joshua Oigara announced on Thursday.
The proposed transaction will see Kenya’s biggest lender by assets acquire Banque Populaire du Rwanda Plc (BPR) and the African Banking Corporation Tanzania (BancABC), strengthening its business in the two countries.
Under the proposed deal KCB will the acquire a 62.06 per cent stake in Banque Populaire du Rwanda Plc and a 100 per cent stake in African Banking Corporation Tanzania.
The transaction is subject to obtaining shareholder and regulatory approvals in Rwanda and Tanzania.
In a statement, Mr Oigara said the transaction is part of KCB’s "ongoing strategy to explore opportunities for new growth while investing in and maximising 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,” Mr Oigara said.
“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.”
In Rwanda the acquisition 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.
In Tanzania, the subsequent merger of BancABC with KCB Bank Tanzania, a subsidiary of KCB Group, will integrate KCB Tanzania’s strong retail and corporate banking franchise with BancABC’s retail and commercial banking operations.
The merged entity is expected to rank as a top ten bank in the industry.
“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 currently has operations in six countries — Kenya, Uganda, Tanzania, Rwanda, Burundi and South Sudan— and a representative office in Ethiopia.
The KCB deal comes months after Equity Bank Group called off its plan to acquire four banking subsidiaries from Atlas Mara Limited in a move aimed at preserving its capital in the wake of the Covid-19 pandemic.
The parties had initiated talks in April last year, but the negotiations targeting Atlas Mara’s units in Rwanda, Zambia, Tanzania and Mozambique dragged on until the pandemic hit.
The London-listed firm had said then it would seek another buyer for the four banks after the Equity deal collapsed.
