Commercial Bank of Africa (CBA) has set up shop in Uganda to cut reliance on the Kenyan market, underlining the expansion mood of the Kenyatta family commercial empire.
The bank joined the Ugandan market late last month after being granted licence by the banking regulator.
“We confirm that Bank of Uganda has given a licence to the Commercial Bank of Africa (Uganda) Ltd bringing the number of commercial banks in our market to 26,” the Bank of Uganda said in a statement.
CBA becomes the ninth Kenyan bank to set up shop in Uganda, joining the likes of Equity, KCB, Diamond Trust, Fina and NIC Bank, which already have operations there.
The bank already has a presence in Tanzania and has ambitions to open more foreign subsidiaries, with its target being South Sudan, Rwanda, Burundi, Ethiopia and the Democratic Republic of Congo.
The bank has appointed Samuel Odeke as the executive officer of the Uganda subsidiary.
The 11 Kenyan banks with foreign branches had a combined profit of Sh5.1 billion in 2012 up from Sh2.3 billion the previous year, underlining the importance of the units to the lenders’ bottom lines.
READ: Bank subsidiaries boost growth for Kenyan lenders
South Sudan has emerged as one of the most lucrative countries in the East African region, where Kenyan banks are expanding into to take advantage of low penetration of financial services.
It accounted for 47 per cent of the profits, followed by Tanzania at 31 per cent and Uganda at 12.5 per cent.
This comes despite Kenyan banks having increasingly focused on Uganda, which had 125 branches of the subsidiaries in 2012. South Sudan had 31 branches.
CBA has 22 branches in Kenya, 12 in Tanzania and is pursuing the financial supermarket model that involves issuing loans, steering deals and selling shares.
Besides the bank, it has an investment banking arm dubbed CBA Capital and last year received stockbrokerage licence to allow it directly trade shares for clients at the Nairobi Securities Exchange.
A number of companies associated with the Kenyatta family have been on an expansion mode in recent months. The business empire has in recent months made fresh bets in the hospitality, dairy, media and banking sectors.
Besides CBA, high-end Heritage Hotels, Brookside and Mediamax Group — which owns K24 TV, Kameme Radio and The People newspaper— top the list of Kenyatta’s business empire that are revamping their operations.