Kenyan banks lead regional peers with 150 new branches

Central Bank of Kenya. FILE PHOTO | NMG

KCB Group’s acquisition of Rwandan bank has extended Kenya’s domination of the East African financial market with a 44 percent rise in bank branches to 494 locations last year.

The Central Bank of Kenya (CBK) data shows Kenyan bank outlets in the region jumped from 343 after KCB acquired Rwandese lender Banque Populaire du Rwanda (BPR) from London-listed financial services firm Atlas Mara Limited.

KCB Bank tripled its regional branch network last year to 196 outlets, I&M Bank also increased its regional presence to 35 outlets from 22 in the previous year, while Equity Bank opened two new outlets to 148 regional locations.

NCBA and Diamond Trust Bank each closed down an outlet while Guaranty Trust Bank, Co-Operative Bank and ABC Bank retained their current locations.

“This led to growth in the total number of branches of Kenyan bank subsidiaries in EAC (East African Community) partner states and DRC (Democratic Republic of Congo) by 44 percent from 343 branches recorded as at December 31, 2020, to 494 recorded as at December 31, 2021,” said the CBK in the 2021 supervision report.

“The growth was mainly driven by KCB Group Rwanda Plc’s acquisition of BPR in Rwanda.”

The high rate of financial inclusion and digital banking has forced Kenyan lenders to look outside the local markets for growth. The CBK data shows the Kenyan lenders that have expanded abroad are running operations with total assets of Sh1.2 trillion in the region.

The banks issued loans worth Sh510.3 billion and raked in Sh17.23 billion in profits from East African subsidiaries.

The Kenyan lenders have now employed 8,712 East Africans in the subsidiaries.

KCB’s Rwanda expansion places the country as the leading location of Kenyan lenders with 197 outlets overtaking Uganda, which has traditionally dominated with 119 bank branches. Tanzania follows with 76 outlets, DRC with 70 spots, South Sudan with 22 and Burundi with 10 branches.

The push for bank acquisitions has seen KCB battle with Equity Bank Group fight for regional domination in the race for boosting their asset base to more than Sh1 trillion.

KCB Bank and Equity Group have been top rivals with each battling for a superior customer base and assets to grow market share, which has sent them on a regional acquisitions spree.

The KCB deal came months after Equity Group called off its plan to acquire four banking subsidiaries from Atlas Mara Limited to preserve its capital in the wake of the Covid-19 pandemic.

The parties had initiated talks in 2020, but the negotiations dragged on until the pandemic hit.

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