- KCB Group Plc has acquired Trust Merchant Bank SA (TMB) after receiving all the regulatory approvals
- The regional lender now owns 85% stake in the Democratic Republic of Congo (DRC) based lender
- The acquisition of TMB would positively contribute towards KCB’s increased scale of operations by establishing its presence in new markets
KCB Group Plc has acquired Trust Merchant Bank SA (TMB) after receiving all the regulatory approvals. The regional lender now owns 85% stake in the Democratic Republic of Congo (DRC) based lender.
KCB Group obtained the regulatory green light in Kenya, the Democratic Republic of Congo and COMESA Competition Commission, setting the stage for the Group to acquire the 85% of the shares in TMB.
Why KCB has acquired TMB
KCB Group CEO Paul Russo said the acquisition of TMB would positively contribute towards the group’s increased scale of operations by establishing its presence in new markets and providing income diversification from a geographical perspective.
Further, the transaction would enable the group to accelerate its market presence in the DRC in the near term by leveraging on TMB’s 18-year operational history, vast branch network, valuable local customer relationships and deep knowledge of local business dynamics.
In addition to the core banking business of TMB, the existence of an insurance subsidiary Afrissur SA will provide an opportunity for KCB to diversify its offerings in DRC’s insurance sector. This Transaction will provide KCB a strategic foundation to capitalise on cross-border trade from the Indian to the Atlantic Oceans.
“We have found a partner with a proven and trusted history of serving and supporting customers, businesses, and communities. Combining our common legacies and our complementary footprints will strengthen our ability to serve our communities and regional customers and provide solutions that make a difference in people’s lives,” Russo said.
“The acquisition extends our reach by providing customers access to a larger banking network and an expanded array of services. Our shared banking philosophies will provide significant long-term value for our shareholders, employees, and customers. I am incredibly excited about this opportunity and look forward to welcoming new customers and team members to the KCB family,” he added.
KCB Group will operate TMB with its current brand and enhance the current business operating model with the capabilities KCB has built over time in systems and processes. This will build on the strengths of TMB and enable TMB to deliver significant incremental value by being part of KCB.
TMB, a public company limited by shares, is one of DRC’s largest banks with US$1.5 billion in total assets. TMB has a strong offering in Retail, SME, Corporate and Digital banking channels. It has over 110 branches and numerous agency banking outlets spread across DRC.
KCB has acquired TMB to create more opportunities
“We see significant business opportunities from this acquisition arising from delivering innovative financial services to customers, growing linkages between customers in our region and realising operational efficiencies which will deliver tangible value to key stakeholders,” said Russo.
In the nine months ending September 2022, KCB Group Plc’s net profit rose 21.4% to KShs.30.6 billion on the back of sustained growth from both Net interest and non-funded income lines. This was a jump from KShs.25.2 billion reported for the same period last year.
TMB is one of DRC’s largest banks, with US$1.7 billion in total assets and a strong offering in Retail, SME, Corporate and Digital banking channels. TMB’s bank branch network of 109 branches is supported by a substantial agency banking network, alongside a representative office in Belgium. In the DRC, the Bank commands an 11% market share as measured by total assets and is home to more than one in five banks accounts in the country.
KCB launches BPR Bank Rwanda PLC
The deal comes months after KCB launched BPR Bank Rwanda PLC, following the amalgamation of KCB Bank Rwanda and Banque Populaire du Rwanda (BPR).
In May 2022, the two banks merged the two entities, which now operate as a single entity named BPR Bank Plc, with KCB Group as the majority shareholder.
Following the merger, the bank became the second-largest bank in the Rwanda banking industry.