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Kenyan banks harvest Shs257b profits from Ugandan subsidiaries
Equity is one of the Kenyan banks with a large presence in Uganda. Photo / File
What you need to know:
- In Uganda, Kenyan banks operate several subsidiaries including KCB, Equity, I&M and NCBA, among others
Kenyan banks earned at least Shs256.5b (Ksh8.89b) in profits from their subsidiaries in Uganda in the period ended December 2023, according to the annual supervision report by the Central Bank of Kenya.
However, Uganda was ranked as the third most profitable for Kenyan banks, coming behind DR Congo and Rwanda, respectively, but ahead of Tanzania and South Sudan.
In Uganda, Kenyan banks operate several subsidiaries including KCB, Equity, I&M and NCBA, among others.
The market penetration of Kenyan banks into the East African region has increased its earnings from regional subsidiaries, which more than doubled in 2023. .
The Central Bank of Kenya annual supervision report shows that Kenyan banks in the region recorded a cumulative gross profit of Shs1.9 trillion (Ksh66.13b) in 2023.
The record profit represents a 103.4 percent growth from the Shs933b (Ksh32.33b) in 2022.
DR Congo and Rwanda were the most lucrative, accounting for 66.4 percent of total profits earned from subsidiaries.
The DR Cong market raked in Shs868.6b (Ksh30.1b) while Rwandese raked in Shs398.5b (Ksh13.81b).
Tanzania, which overtook South Sudan, bounced from just Shs26.4b (Ksh918m) in 2022 to earn Shs162.7b (Sh5.64b) in 2023.
Notably, the DR Congo market grew the fastest having more than tripled from Shs282.3b) (Ksh9.785b) in 2022 and shows greater growth prospects in the future.
Kenyan banks have been channeling resources into the mineral rich DR Congo.
Only two Kenya banks, however, have a presence in DR Congo, including KCB, which has 109 branches, and Equity Group with 79 branches.
The Central Bank of Kenya report indicates that DR Cong accounted for 36.4 percent of Shs11.6 trillion (Ksh402b) of total loans by Kenyan banks in the region up from 34 percent in 2022.
The value of assets by subsidiaries in 2023 grew by 43.1 percent to Shs66.6 trillion (Ksh2.31 trillion) with DR Cong accounting for 39.3 percent or Shs26.2 trillion (Sh910.64b).
“The growth was mainly driven by the opening of new branches by KCB Group’s, Trust Merchant Bank in the Democratic Republic of Congo,” notes the report.
