KCB Group has disclosed an additional UGX32.3 billion (KSh1.2bn) equity investment in the Ugandan unit during the financial year ended December 2022 as it moved to strengthen its subsidiaries.
The equity investment, disclosed in the latest KCB annual report, pushed the value of investment in KCB Bank Uganda to Shs4.34 billion from Shs3.14 billion in the previous year.
The investment in Uganda added to the Sh25.11 billion that KCB spent during the year on acquiring an 85 percent stake in DRC lender, Trust Merchant Bank (TMB).
The two transactions marked KCB’s continued focus on growing its business outside Kenya.
KCB Bank Uganda’s net profit grew from Sh270 million in 2021 to Sh1.04 billion last year on increased interest and non-interest income.
The 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.
Rwanda was the most profitable subsidiary, with a net profit of Sh2.03 billion, followed by Tanzania (Sh1.09 billion) and then Uganda.
The South Sudan and Burundi operations returned Sh938 million and Sh600 million net profit respectively as the DRC one posted Sh291 million net loss for the month of December when the acquisition of TMB happened.
KCB said TMB contributed Sh2.32 billion in revenue in the month of December and estimates that revenues would have been Sh15.29 billion and a pre-tax profit of Sh3.04 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 percent 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 percent stake in African Banking Corporation Tanzania Limited collapsed in December 2021.
KCB’s total assets grew by 36.4 percent to Sh1.55 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 percent to Sh1.135 trillion, mainly from TMB and organic growth in the existing businesses.