On Thursday, the bank's share at the Nairobi bourse opened at Sh41, having closed among the top five gainers the previous day.
Analysts forecast the share to rally a daily two per cent growth every day this month even as the lender finalises an 85 per cent stake in Trust Merchant Bank (TMB), the third-largest bank in DRC in terms of asset value.
On Tuesday, KCB Group which already has presence in Tanzania, Uganda, Rwanda and Burundi and South Sudan said it would buy the majority stake at 1.49 times the book value of TMB.
It plans to fully buy out the DRC-based bank with an asset base of Sh1.5 trillion in the next two years.
Speaking to the Star, financial market analyst Jerry Kiamba said the expansion plan asserts KCB's stability to investors who are counting on a diversified market to spread the risk.
Unlike East Africa which relies on service and agriculture, DRC is mineral rich, offering banks a chance to spread the risk across economic sectors. Its high population of over 80 million is gold for any investor,'' Kiamba said.
He added that he sees KCB Group share scaling back to pre-Covid highs of Sh50 by end of the initial 75 per cent acquisition as volatilities in the global market soften.
Wilson Kyalo of Pan African Credit says the expansion to other regions eases concentrations of the firm's operations in Kenya, a concern Moody's raised on the lender in June when it awarded it a B+ rating with a negative outlook.
He expects high demand for KCB's share, with investors hoping to reap from benefits that come with an expanded market.
''The bank's share is currently in the BUY position. The high demand is likely to push up its value in the coming days. I see it settling at an average of Sh45 by the close of the year,'' Kyalo said.
KCB's chairman Andrew Kairu said the acquisition gives it a strong headroom to accelerate growth ambitions to deliver better value for shareholders.
It would also 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 catalysing DRC’s and indeed East Africa’s economic expansion agenda,” he said.
The expansion to Congo is coming three months after it concluded the acquisition of Rwanda’s most popular bank- Banque Populaire du Rwanda Plc (BPR).
The lender merged KCB Bank Rwanda with BPR in early May, making the subsidiary the second-largest lender in Rwanda.
KCB which after the transaction is likely to almost double its current total asset value is in stiff competition with Equity Bank which is already operating in the new East Africa Community (EAC) member country.
Equity in 2019 paid Sh10.7 billion to acquire a 66 per cent stake in BCDC owned by The Kenya bank already had a subsidiary in DR Congo, which it acquired in May 2015, and integrated the two banks in a merger that created the second largest bank in the Central African nation.
The amalgamation of Equity Bank Congo and BCDC created a bank with a balance sheet in excess of Sh200 billion. It contributes 20 per cent of the Group’s total balance sheet.
The two giant Kenyan lenders are in a supremacy battle, with each flexing asset muscle that has crossed Sh1 trillion.
KCB's balance sheet expanded by 19.3 per cent to Sh1.2 trillion, driven by organic growth across the business and the consolidation of BPR in the first three months of the year.
Equity Bank Holding's total assets closed Q1 2022 at Sh1.26 trillion.
