KCB sets sights on Congo, Ethiopia in growth plans

KCB Group #ticker:KCB is eyeing the Democratic Republic of Congo (DRC), chief executive Joshua Oigara disclosed on Friday.

The lender is looking at additional markets for expansion while awaiting a licence to operate in Ethiopia, where it already has a representative office.

“We are talking about two markets in trying to scale up our businesses so the market we are looking at is Congo and Ethiopia because they are very much aligned to our business,” he said. “For us there is a chance to really grow our business to reach the psychological height of Sh1 trillion of balance sheet size which is a strong size.”

Mr Oigara did not provide a timeline for the DRC entry by KCB, which also operates in Uganda, Tanzania, Rwanda, Burundi and South Sudan.

By setting its eyes in the DRC, KCB will be taking the war for regional dominance to its local rival Equity Bank #ticker:EQTY, which recently deepened its presence in DRC after acquiring Congo’s second largest lender Banque Commerciale du Congo (BCDC).

Access to banking services in the resource-rich nation is lower than other countries in sub-Saharan Africa. About 90 per cent of the population is unbanked, according to official statistics.

Both banks, Kenya’s two biggest by profit and asset size, have been looking beyond Kenya’s borders in search of new revenue generating markets.

KCB has meanwhile continued to eye establishment of operations in Ethiopia where reformist Prime Minister Abiy Ahmed is opening up the economy, creating opportunity for foreign investors.

The lender said last year it hopes to enter the market of 100 million people through a partnership with an Ethiopian bank or opening a fully-fledged subsidiary in the country, which has no foreign bank.

KCB profit for the first six months of 2019 hit Sh12.7 billion, surpassing its rival Equity Bank whose half-year net earnings increased nine percent to Sh12 billion, in the period.