KCB Group has taken a 77 percent stake in BPR Rwanda, the subsidiary that was created from the merger of KCB Bank Rwanda and Banque Populaire du Rwanda (BPR).
The Nairobi Securities Exchange-listed firm previously owned 100 percent of KCB Bank Rwanda. It acquired a 62.06 percent stake in Banque Populaire du Rwanda (BPR) last year at a total cost of Sh5.3 billion.
It recently merged the two subsidiaries to create BPR Rwanda whose owners include former minority investors of BPR whose interests were transferred to the unified bank.
KCB had acquired the majority stake in BPR from institutional investors Arise B.V. and Atlas Mara Limited. The ownership changes arising from the consolidation of the Rwanda banking operations have been disclosed by the Kenyan banking multinational in its latest annual report.
Acquisition of the Rwandan bank contributed to KCB’s investment in subsidiaries rising to Sh87.9 billion in the year ended December from Sh79.6 billion the year before.
“Having completed the acquisition of BPR within the year, the new subsidiary brought in Sh21 billion in net loans and Sh26 billion in customer deposits to our group balance sheet,” KCB said.
“Furthermore, the acquisition contributed Sh477 million in profit before tax to our bottom-line for the five months in 2021 that we have consolidated the bank’s results in our books post-acquisition, raising the total contribution of our subsidiaries outside of KCB Bank Kenya to 14 percent and well on course towards our 20 percent target.”
BPR Rwanda is now the second-largest lender in Rwanda and is also the most profitable subsidiary in the regional market.
The Kenyan banking multinational saw its pre-tax earnings from Rwanda –comprising the results of the two institutions before their amalgamation— rise by 71 percent or Sh450 million to Sh1.08 billion in the year ended December.
BPR was among the banks that KCB was seeking to acquire as part of its regional growth and diversification strategy.
The bank is currently pursuing an acquisition in the Democratic Republic of Congo (DRC) after a buyout in Tanzania was called off due to regulatory hurdles.
KCB and other big banks like Equity Group are expanding aggressively in the region, seeking diversification and growth in neighbouring countries.
The home-grown lenders, however, still get most of their earnings from the local market but their foreign subsidiaries’ contribution to consolidated earnings has been on the rise.