KCB places 85% bid for Congo's TMB Bank

TMB, a public company limited by shares has an asset base of Sh1.5 trillion.

In Summary

•The lender is currently second to Equity Group in terms of asset leadership in the country. Both have since crossed the Sh1 trillion base.

•In a statement, the lender said the transaction is expected to close by the end of September subject to regulatory and shareholders' approvals.

KCB Bank.
KCB Bank.
Image: COURTESY

KCB Group Plc is planning to acquire a majority stake in a DRC-based TMB Bank, a move likely to see it regain its position as the largest lender in Kenya.

The lender is currently second to Equity Group in terms of asset leadership in the country. Both have since crossed the Sh1 trillion base.

In a statement, the lender said the transaction is expected to close by the end of September subject to regulatory and shareholders' approvals.

This will see KCB acquire 85 per cent of the shares in TMB while the existing shareholders will continue to hold the balance for a period of not less than two years after which, KCB will acquire their shares.

KCB will pay cash consideration for the shares determined based on the net asset value of TMB at the completion of the proposed transaction, and using a price to book multiple of 1.49.

TMB, a public company limited by shares has an asset base of Sh1.5 trillion and is expected to strengthen to the Group’s retail and corporate banking franchises.

“This is part of our ongoing strategy to tap into opportunities for new growth while investing in and maximizing returns from the Group’s existing businesses," KCB Group said.

It added that the acquisition gives it a strong headroom to accelerate growth ambitions to deliver better value for shareholders and to bolster the push for deeper financial inclusion and social and economic transformation in Africa.

"We are excited that we can now play a role in catalyzing DRC’s and indeed East Africa’s economic expansion agenda,” KCB Group chairman Andrew Wambari Kairu said.

He added that KCB is excited about the opportunities it offers in this transaction and is proud to bring Its unique DRC insights and experience to the KCB Group.

"We believe that by combining our local knowledge and standing with the size and expertise of KCB Group, we should be able to increase market share and shareholder value through unlocking our synergies and business opportunities,” Robert Levy, TMB chairman said.

TMB customers are expected to benefit from best-in-class digital capabilities, transactional banking solutions, trade finance expertise and access to regional business opportunities offered by KCB Group.

It will in return give KCB Group access to Africa’s second-largest country with a population of over 93 million people.

In the three months ending March 2022, KCB's net profit surged 54.6 per cent to Sh9.9 billion.

This was an increase from Sh6.4 billion in a similar period last year boosted by growth in total income and reduction in loan loss provision.

Revenues increased by 26 per cent to Sh29 billion on account of an increase in interest income, an increase in non-funded income from lending activities and service fees and a 21.1 per cent rise in earning

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