The Democratic Republic of Congo (DRC) has overtaken Rwanda as probably the most worthwhile marketplace for subsidiaries of Kenyan banks inside the East African Group (EAC), highlighting the alternatives within the mineral-rich Central African nation.
Newest information by the Central Financial institution of Kenya (CBK) exhibits that the pre-tax revenue realised within the DRC market by subsidiaries of Kenyan banks greater than doubled to Ksh66.13 billion ($504.81 million) in 2023, from Ksh32.51 billion ($248.17 million) in 2022.
The DRC market contributed the very best proportion of the overall earnings by Kenyan banks’ regional subsidiaries, equal to 45.52 p.c (Ksh30 billion — $229 million).
Subsidiaries in Rwanda and Uganda contributed 20.89 p.c and 13.45 p.c of the overall earnings respectively, whereas subsidiaries in Tanzania contributed 8.53 p.c.
In line with CBK, subsidiaries in South Sudan, Mauritius and Burundi had been the least worthwhile, contributing 6.67 p.c, 3.40 p.c and 1.56 p.c of the overall earnings, respectively.
“One subsidiary working in Uganda reported a lack of Ksh25.4 million ($193,893),” CBK’s Financial institution Supervision Annual Report (2023) says
Learn: DRC now Kenya’s fastest-growing EAC export market.
Gross loans
The gross loans for the regional subsidiaries elevated by 52.2 p.c to Ksh1.1 trillion ($8.4 billion) in 2023, from Ksh725.8 billion ($5.54 billion) in 2022.
The Congolese subsidiaries of Kenyan banks recorded the very best stage of gross loans at Ksh402 billion ($3.07 billion) accounting for 36.4 p.c of gross loans in all of the subsidiaries exterior Kenya.
It was adopted by subsidiaries in Tanzania, which accounted for 18.6 p.c, Rwanda (17.4 p.c) and Uganda (16.1 p.c).
Mauritius recorded gross loans of Ksh102 billion ($778.63 million), accounting for 9.3 p.c.
Fairness and KCB teams’ subsidiaries in DRC— Banque Commerciale Du Congo (EquityBCDC) and Belief Service provider Financial institution (TMB) — accounted for the lion’s share of the overall subsidiaries’ property and deposits in DRC.
Learn: Fairness pilots insurance coverage in DRC forward of regional rollout
The mixed deposit base of Kenyan financial institution subsidiaries elevated by 42.18 p.c to Ksh1.82 trillion ($13.89 billion) in 2023, from Ksh1.28 trillion ($9.77 billion) in 2022, with the primary contributor of deposits, EquityBCDC, accounting for 28 p.c (Ksh504 billion — $3.85 billion) of the overall deposits.
It was adopted by KCB’s TMB with whole deposits of Ksh251 billion ($1.92 billion), representing 14 p.c of the overall deposits.
The full property of Kenyan subsidiaries within the area elevated by 43 p.c to Ksh2.31 trillion ($17.63 billion) in 2023, from Ksh1.61 trillion ($12.29 billion) in 2022, with a big contributor to the asset base being EquityBCDC, with whole property of Ksh622 billion ($4.75 billion), and KCB‘s Belief Service provider Financial institution, with the overall property of Ksh288 billion ($2.2 billion).
Banking market
The Rwandan market was Kenya’s worthwhile banking market from 2017 to 2022, whereas Tanzania and South Sudan topped the earnings record in 2016 and 2015 respectively, based on CBK information.
Kenyan banks first entered the Congolese banking market in 2016, when Fairness Group acquired 86.6 p.c stake in a German bank-ProCredit and renamed the subsidiary Fairness Financial institution Congo (EBC) SA.
Fairness Group then acquired a 66.53 p.c stake in one other Congolese lender, Banque Commerciale Du Congo (BCDC) — Kinshasa’s second-largest lender by property — in August 2022, and merged the 2 subsidiaries to type a brand new financial institution, EquityBCDC
KCB Group entered the market by way of the acquisition of 85 p.c stake within the Belief Service provider Financial institution in December 2022.
The scramble for the DRC market by the area’s massive banks deepened after Kinshasa joined the EAC in 2022.
Tanzania’s largest retail financial institution by property, CRDB, additionally arrange a subsidiary within the giant industrial metropolis of Lubumbashi in southeast DRC, in 2023.
In Rwanda, KCB acquired a 62.06 p.c stake in Banque Populaire du Rwanda (BPR) from the British monetary companies conglomerate Atlas Mara Ltd in 2021 and later elevated the stake to 76.67 p.c by buying further shares from the minority shareholders.
Fairness Group’s internet revenue grew by 25.1 p.c to Ksh15.39 billion ($117.48 million) within the three months to March 31, 2024, with 28 p.c of the online group’s earnings coming from EquityBCDC, adopted by Fairness Financial institution South Sudan (14.29 p.c), Fairness Financial institution Rwanda (8.44 p.c), Fairness Financial institution Uganda (5.84 p.c), and Fairness Financial institution Tanzania (0.64 p.c).
EquityBCDC recorded a 28 p.c development in internet revenue to Ksh4.3 billion ($32.82 million), Uganda posted a two p.c rise in internet revenue to Ksh900 million (6.87 million), whereas the Tanzanian subsidiary noticed a 51 p.c decline in internet revenue to Ksh100 million ($763,358).
