KCB has edged ahead of Safaricom in the value of net assets after the consolidation of its Congo DRC acquisition and strong loan growth in other regional subsidiaries.
The lender’s net assets—total assets less total liabilities—rose to Sh206.28 billion by the end of December from Sh173.5 billion a year earlier, its full-year financials for 2022 show.
Safaricom, which is the biggest listed company in Kenya by market capitalisation, had net assets worth Sh186.79 billion on its books as of the six months ending September 2022, when it released its most recent financial results. It had net assets worth Sh178.8 billion a year earlier.
Safaricom, however, trades at a much larger premium on the Nairobi Securities Exchange where it is valued at Sh725 billion or 6.3 times KCB's Sh113 billion as of Friday.
KCB entered the DRC market last year with the acquisition of an 85 percent stake in Trust Merchant Bank (TMB), in a deal that was closed in December.
The acquisition was priced at 1.49 times the book value or net assets of the DRC lender, which as of the end of 2021 stood at Sh14.15 billion. This valued the takeover at Sh17.9 billion at this multiple.
The DRC entry came just months following KCB’s acquisition of Rwandese lender Banque Populaire du Rwanda (BPR) from London-listed financial services firm Atlas Mara Limited in August 2021.
The Rwandese acquisition was merged with KCB’s existing subsidiary in the country and renamed BPR Bank.
Both the telco and the bank have recently made moves into new markets, opening up avenues for new assets on their books, as has Equity Group which reported net assets worth Sh182.2 billion at the end of last year.
Equity’s foray into the DRC, where it owns the Equity BCDC subsidiary, has given it its most profitable unit outside of Kenya.
The DRC also houses the operations with the most assets for both KCB and Equity outside Kenya, underlining the growing importance of the market for Kenyan businesses and lenders.
Disclosures by KCB show TMB held 13.5 percent of KCB’s total assets of Sh1.55 trillion as of December. Equity BCD accounted for 30 percent of Equity Group’s total assets worth Sh1.447 trillion in the period.
Safaricom however leads both lenders in profitability, even though they have closed the gap in the last two years.
The telco’s profit of Sh67.5 billion in the year ended March 2022, is now 1.46 times that of Equity (Sh46.1 billion for the year ended December 2022) compared to 3.66 times more in 2020, when the telco’s profits peaked.
