Kenya’s Largest Bank To Enter Southern Africa Via Botswana Stock Exchange
Kenya Commercial Bank (KCB), the country’s largest by assets, is set to enter the Southern Africa market after it signed a deal with Motswedi Securities, a brokerage firm, to raise funds and trade at the Nairobi and Botswana Stock Exchanges.
The move is part of the lender’s efforts to spread operations outside the Eastern Africa region and reduce reliance on the Kenyan market that accounts for 90 percent of its revenue.
“We want to raise capital and investments in each other’s market. For specific projects, we are in talks for one major project in Botswana and now that I am here, we will also be looking at what opportunities are available in Kenya, Standard quoted Martin Makgatlhe, the founder of Motswedi Securities.
The anticipated entry into Southern Africa through the Botswana market comes after KCB announced plans to open branches in neighboring Ethiopia, Somalia and the Democratic Republic of Congo (DRC).
The Kenyan lender will become the first local bank to open subsidiaries in the three markets, after Equity Group halted its expansion into DRC.
“Next year, we want to go into more markets. Democratic Republic of Congo remains a key focus for the group. We are keen on Ethiopia, Somalia and also the Southern Africa area, Joshua Oigara, KCB Group Chief Executive Officer told Reuters.
This will increase its branches from the current 15 to 20.
In September, the bank secured entry into Somalia, after President Uhuru Kenyatta signed an agreement with the government, allowing KCB to open its branch by the end of the year, in a country where only four percent of the population has access to banking services.
The lender is the only Kenyan bank operating in the six East African community member states of Uganda, Tanzania, Rwanda, Burundi, South Sudan and Kenya.
South Sudan is the bank’s most profitable foreign subsidiary. It contributed $ 13.7 million (Sh 1.4 billion), a 9.2 percent of the bank’s pre-tax profit of $149.5 million (15.2 billion) in June, Business Daily reported.
KCB controls at least 40 percent of the South Sudan market, despite closing three of its 21 branches in the war-torn nation.
The lender is also targeting expansion into Mozambique and Djibouti by 2020.