KCB to mark DRC entry in Trust Merchant Bank acquisition

KCB Group is set to mark its entry into the Democratic Republic of Congo (DRC) market with the planned acquisition of an 85 per cent stake in Trust Merchant Bank (TMB).

The transaction is expected to close by the end of September after the capture of requisite shareholder and regulatory approval.

KCB is set to offer a cash consideration for the shares of TMB based on the net asset value of the lender at the end of the transaction.

At the same time, KCB Group says it will retain minority shareholders in the transaction for at least two years before buying them out.

The impending transaction is aligned with KCB strategy of scaling its regional presence.

“This is part of our ongoing strategy to tap into opportunities for new growth while investing in and maximizing returns from the Group’s existing businesses. It gives us strong headroom to accelerate our growth ambitions to deliver better value for our shareholders and to bolster the push for deeper financial inclusion and social and economic transformation in Africa and beyond,” noted KCB Group Chairman Andrew Kairu.

Earlier this year, KCB stated it was keen on acquiring a lender in the DRC to mark its entry into the populous country after a deal to acquire the African Banking Corporation Tanzania Limited (BancABC) fell through at the back end of 2021.

Further, the deal will come hot on the heels of KCB acquisition of the Banque Populaire Du Rwanda (The Popular Bank of Rwanda) which it merged to its Rwandese operations earlier this year to create a new entity dubbed BPR Bank Rwanda Plc.

The new acquisition is expected to grow KCB’s asset base from the current Ksh.1.5 trillion.

KCB joins its peer rival Equity in the DRC where the latter operates the biggest bank in the country following the acquisition of a controlling stake in the Banque Commerciale Du Congo (BCDC) in 2020.

The pair are presently Kenya’s largest banks by asset size with Equity holding the narrow lead as the larger entity as of the quarter ended March 2022.

Both banks have achieved their sheer sizes through regional mergers and acquisitions.

By acquiring a controlling stake in TMB, KCB is set to inherit an asset base of Ksh.178.5 billion ($1.5 billion) and over 110 branches and agency banking outlets spread out across the DRC.