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KCB Group Invests Extra U$8.6M in Ugandan Unit

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Reports reaching Taarifa Business Desk indicate that KCB Group unit in the Ugandan capital Kampala has received a boost worth U$8,673,653.76 (Ksh1.2 billion) according to the groups annual report.

The boost injected during the financial year ended December 2022 is aimed at strengthening KCB Group’s subsidiaries.

The report indicates that the value of investment in KCB Bank Uganda has increased to KSh4.34 billion from KSh3.14 billion in the previous year.

KCB Bank Uganda’s net profit grew from KSh270 million in 2021 to KSh1.04 billion last year on increased interest and non-interest income.

The Ugandan unit last year marked 15 years of operations with the launch of a digital campaign and roll-out of online account opening, smart ATMs and artificial intelligence-powered chatbots.

Meanwhile, investment in Uganda added to the KSh25.11 billion that KCB spent during the year on acquiring an 85% stake in DRC lender, Trust Merchant Bank (TMB).

The two transactions marked KCB’s continued focus on growing its business outside Kenya.

Rwanda was the most profitable subsidiary, with a net profit of KSh2.03 billion, followed by Tanzania (KSh1.09 billion) and then Uganda.

The South Sudan and Burundi operations returned KSh938 million and KSh600 million net profit respectively as the DRC one posted KSh291 million net loss for the month of December when the acquisition of TMB happened.

KCB said TMB contributed KSh2.32 billion in revenue in the month of December and estimates that revenues would have been KSh15.29 billion and a pre-tax profit of KSh3.04 billion had the acquisition taken place at the start of last year.

This means the DRC unit may this year rival BPR Bank Rwanda in profitability. KCB says it has the preference right of acquiring the remaining 15% stake in TMB within 60 days after December 15 next year.

KCB Group closed last year with 603 branches, a rise from 492 in the previous year and now plans to open 12 new branches in Kenya and Tanzania to deepen its lead on physical locations.

Some six branches will be in Kenya while an equal number will be in Tanzania where KCB is still eying acquisitions after the deal to acquire a 100% stake in African Banking Corporation Tanzania Limited collapsed in December 2021.

KCB’s total assets grew by 36.4% to KSh1.55 trillion at the end of December, helped by increased lending, investment in government securities and funded by growth in customer deposits and additional borrowings.

Customer deposits hit the trillion-shilling mark, increasing by 35.6% to KSh1.135 trillion, mainly from TMB and organic growth in the existing businesses.

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