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KCB to close South Sudan branches over conflict
KCB branch in Wau, South Sudan. Courtesy photo
NAIROBI. East Africa’s biggest bank by assets KCB Group plans to shut down some of its branches in South Sudan, citing civil strife, devaluation of the country’s currency, and hyperinflation which negatively impacted the lender’s earnings last year.
KCB, which has 19 branches in South Sudan, now wants to cut its exposure in Africa’s newest nation where the bank took a Sh3.4 billion hit due to hyperinflation in 2016.
“KCB Group board of directors has approved the temporary closure of some branches in South Sudan, driven by logistical and operational challenges that have made operating some of these branches unsustainable,” the bank told the Business Daily, a sister newspaper to Daily Monitor. “A change in the economic situation will lead to a re-assessment of the viability of branches.”
South Sudan’s inflation rate hit 830 per cent in late 2016, and the South Sudanese pound has been on a free fall — currently trading at 108 units to the US dollar compared to 2.95 units at which it was fixed until December 2015 when Juba adopted a free floating foreign exchange regime.
KCB ventured into South Sudan in 2006 and the wholly-owned subsidiary quickly rose to become the most profitable unit. The closure is likely to lead to job losses, the bank has warned.
