Bank of Kigali seeks to open office in Kenya, says regulator

Bank of Kigali has become the first bank in Rwanda to seek regional expansion by applying to open representative office in Kenya.

Central Bank of Kenya governor Njuguna Ndung’u acknowledged the regulator is currently reviewing an application by the Rwandan bank seeking to set up office in the country. The bank had declared its intention to be represented in Kenya by end of this year.

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“It is worth noting that it is not only Kenyan banks that are expanding across the borders but banks in the other East African countries have also embraced the opportunity,” said Prof Ndung’u while launching Kenya Commercial Bank’s (KCB) supervisory college. “A case in point is the application by Bank of Kigali to establish a representative office in Kenya.”

Bank of Kigali listed on the Rwanda Stock Exchange last year and had an asset base of Sh40 billion as at December from which it reported a profit after tax of Sh1.2 billion. Its decision to move into Kenya is seen as a reaction to the close trade ties between the two countries and also as a counter attack to the expansion of Kenyan banks into its turf.

“The level of trade between the two countries allows them to have a critical number of clients that it may wish to serve on the same platform,” said Francis Mwangi, an analyst with Standard Investment Bank.

Currently, 10 Kenyan banks have established presence across the Eastern Africa region with Equity and KCB operating branches in Rwanda.
The fact that Bank of Kigali is opening representative offices while Kenyan banks are establishing branches in other markets underscores the dominance of the institutions in the region.

There have been calls for enhanced information sharing and collaboration among financial sector regulators with the growing cross-border expansion.

Prof Ndung’u said he expected more banks to consider regional expansion once there was harmonised legal framework among the EAC central banks.