KCB adds 1,013 staff after purchase of Rwandan lenderMonday March 21 2022
KCB Group #ticker:KCB added 1,013 employees to its payroll last year following its acquisition of a controlling 62.06 percent stake in Banque Populaire du Rwanda Plc (BPR).
The transaction, which made BPR a subsidiary of KCB, raised the workforce of the Kenyan banking multinational to 8,538 in the year ended December. KCB’s staff count stood at 7,525 in the previous year.
The institution is now the biggest employer among Kenyan lenders by staff count.
The increase in the number of employees saw the bank’s staff costs rise 21 percent to Sh24.7 billion in the review period compared to Sh20.4 billion a year earlier. The jump in payroll expenses inflated the bank’s overall costs.
“Costs went up by 11.9 percent to Sh47.8 billion from Sh42.8 billion on account of an increase in staff and organisational costs, consolidation of BPR, and inflationary adjustments across the group,” KCB said in a statement.
The rise in costs was counterbalanced by higher income, a move that saw the bank report a record net income of Sh34 billion. Its cost-to-income ratio, a measure of efficiency, improved to 44 percent from 45 percent in 2020.
KCB acquired BPR as part of its growth and diversification strategy. The 62.06 percent stake was bought from London-based Atlas Mara Limited at a cost of $35.85 million (4.1 billion) including deferred compensation.
KCB intends to fully acquire BPR with an outstanding offer to the institution’s minority shareholders. BPR made a profit before tax of Sh476 million last year, contributing to the parent company’s overall earnings.
KCB says it will soon merge BPR with its other subsidiary in that market –KCB Bank Rwanda— in a move that will enhance efficiencies and build scale.
Bank mergers typically result in the review and rationalisation of branch networks and head office operations, among others.
KCB is among the country’s big banks that are expanding aggressively in the regional market, seeking diversification and growth in neighbouring countries where the uptake of banking services is lower compared to Kenya.
The home-grown lenders, however, still derive most of their earnings from the local market but their foreign subsidiaries’ contribution to consolidated earnings has been on the rise.
KCB says it is currently eyeing the Democratic Republic of Congo market after ending its pursuit of BancABC Tanzania, which is owned by Atlas Mara. The parties called off the Tanzanian deal after facing unspecified regulatory hurdles.