KCB Group PLC has completed the acquisition of Banque Populaire du Rwanda Plc (BPR) from Atlas Mara Mauritius Limited and Arise BV, days after announcing the doubling of its net profit in the six months to June 2021.
According to the Kenya-based regional bank, the acquisition continues to obtain the necessary regulatory approvals in Kenya and Rwanda, making the KCB group the majority shareholder in BPR, Rwanda’s second largest bank, with effect from of August 25, 2021.
KCB Group CEO and MD Joshua Oigara said the completion of the transaction in Rwanda will give the Group a stronger advantage in deepening the group’s ongoing strategy to scale the regional presence.
He added that the combined history of BPR and KCB will take the group to greater heights and give them a stronger advantage to play a greater role in managing the financial inclusion and economic empowerment of the East African region.
“This will increase our scale and improve our operational leverage as it will allow us to deliver our existing retail and wholesale offerings to a wider customer base in Rwanda, positioning the bank for growth. sustainable in the long run, ”Oigara said.
BPR is a strong retail and SME bank with the largest branch network in the sector and a long history spanning more than 45 years in Rwanda.
The plan, Oigara said, is to eventually create a bank in Rwanda that will be named BPR Bank by merging KCB Bank Rwanda and BPR.
The combined bank will become the second largest bank in the industry. KCB Group has appointed an integration committee made up of senior executives to lead the achievement of the only entity in Rwanda in the coming months.
Oigara added that the merger will provide KCB Rwanda’s current customers with access to a larger network of offices and agents across the country.
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In addition, KCB Group intends to acquire a 100% stake in African Banking Corporation Tanzania Limited (BancABC) in ABC Holdings Limited (96.6%) and Tanzania Development Finance Company Limited (3.4%).
However, the proposed acquisition is pending some approvals.
Oigara added that the acquisition of BPR and BancABC provides KCB with the opportunity to rapidly increase its balance sheet and revenue streams, while taking advantage of cost synergies, effectively putting it and all their stakeholders on a path to greater prosperity.
The announcement of the acquisition was made days after the Group announced the results for the middle of 2021.
During the period, the regional bank doubled its profit after reaching 15.3 billion Shs, above the 7.6 billion Shs recorded during a similar period last year.
During the period under review, revenues increased 14 percent due to higher interest income resulting from an increase in asset income and a lower cost of financing.
The group’s total revenue increased 13.7%, to Shs 51.2 billion during the period, and net interest income increased 17.7 percent, to 36.6 billion, from 31.1 billion Sh Shins last year.
This was a consequence of the increase in interest-bearing assets and effective management of the cost of financing during the period.
The Group’s assets stood at Sh1.02 trillion dollars, above the 953 million recorded during the first half of 2020.
Oigara said the bank’s resilient and diverse nature has helped them navigate the impact of the COVID-19 pandemic.
“The business is well positioned to catalyze the ongoing economic recovery and benefit from this resurgence,” he added.
The Group also witnessed a 7% increase in operating costs due to an increase in personnel costs as the Group enforced cost management initiatives to close the business in the face of the impact. of the ongoing health crisis.
The Group’s loans also recorded growth, which grew by 9 to close at 606.9 billion shs.
The bank says its risk fell to 2.2 percent, from 4 percent, and the delinquent lending ratio was 14.3 percent, up from 13.7 percent by 2020.
Despite the impact of the healthcare crisis, the Group said it is on track to achieve its three-year strategy beyond banking, which is based on delivering the best in the customer experience and driving a digital future.
This is according to the president of the bank, Andrew Kairu, who said that although the pandemic is still in the middle, the launch of a vaccine around the world has given hope that the crisis will soon be under control.
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“The resilience and providence of our concerted efforts to strengthen the sustainability of our business have allowed us to support and walk with our customers, staff and other stakeholders,” Kairu said.
“Looking to the future, we believe we will see the operating environment and as a result, our customer business will continue to recover,” he added.
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