KCB Group has completed the acquisition of DRC lender, Trust Merchant Bank (TMB), for a value estimated at more than Sh15 billion, giving the bank a foothold in the vast mineral-endowed central African country.The tier-one lender said the deal to acquire an 85 per cent stake in TMB, first made public last August, has been approved by regulators in Kenya, DRC and Common Market for Eastern and Southern Africa’s (Comesa’s) Competition Commission.
KCB — already with operations in Rwanda, Burundi, Tanzania, Uganda, and South Sudan— has the right to buy out the remaining shareholders in the 109-branch DRC lender in two years.
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The publicly-traded bank sees DRC, which joined the East African Community trading bloc last July, as likely to become the group’s second most profitable country after Kenya in the near term.
Group chief financial officer Lawrence Kimathi said the lender was already working on a deal pipeline of more than Sh28 billion in mining, energy and manufacturing (cement) sectors, signalling growth prospects.
“We announced the binding agreement in August and when the information reached DRC, we started getting a lot of customers who were interested,” Mr Kimathi said.
“A lot of customers were coming to us directly, but we told them ‘you have to work with our soon-to-be subsidiary’. We have incorporated a business team from TMB to structure those deals.”
The Actual Value
KCB has not disclosed the actual value of the deal but previously said the purchase will be priced at 1.49 times the book value or net assets of the DRC lender, working out to nearly Sh20 billion.
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TMB, which also runs its insurance subsidiary Afrissur SA, has been in operation for 18 years.The lender has $1.7 billion (Sh208.8 billion) in total assets, with a strong offering in retail, SME, corporate and digital banking.KCB will retain the brand TMB in DRC because it is “more recognisable and more sentimental to the locals”.
DRC’s entry will see KCB go to head-to-head with Equity, which entered the vast market in 2015 through a buyout of ProCredit Bank and increased market share in 2020 after acquiring another lender — Banque Commerciale du Congo (BCDC).