Kenya’s top lender by assets, KCB Group, announced on Thursday it has entered a binding agreement to purchase a controlling stake in Rwanda’s Banque Populaire du Rwanda and take full ownership of ABC Tanzania at a combined value of $40 million.

The purchase agreements follow a recent trend of Kenyan commercial banks expanding beyond their borders for acquisitions, seeking to tap opportunities in the fast growing and integrating East African region.

KCB already has operations in all East African states and it wants to strengthen its position in those markets and beyond according to CEO Joshua Oigara speaking after the deal was announced.

“When you build transactions growth through business combinations and acquisitions, you don’t stop,” he said.

“We are still very keen for an opportunity for us to grow our business into the DRC (Democratic Republic of Congo) and that is what we will be looking for in the next two years.”

The deal for the purchase of the shares in the Rwandan and Tanzanian lenders is mainly with Atlas Mara Limited, which owns them.

KCB will pay $32 million for the shares in the Rwandan bank and $8 million to fully acquire ABC Tanzania, Lawrence Kimathi, the group’s chief financial officer, told the news conference.

“By mid-next year we should have completed this transaction,” Kimathi said, adding the deal would be funded by KCB’s cash reserves.

Once completed, it will double KCB’s market share in Rwanda and catapult it to the No. 2 bank position in the country, from number six now, Oigara said.

The Tanzanian acquisition will lift KCB into the top 10, from number 13 currently, he added.

KCB, which requires regulatory approvals for the transaction, plans to increase the contribution to its income from regional subsidiaries to 20-25%, from 10% currently, in the next 3-5 years, Oigara said.

The group acquired National Bank of Kenya last year, a deal it expects to contribute $9.10 million to its profit this year.

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