NAIROBI, (Xinhua) --
The prolonged conflict in South Sudan has seen
Kenyan banks scale down operations in the country, and look for
opportunities outside the East African Community (EAC).
The banks have
halved their branches in South Sudan, initially one of the
promising markets, since the war started in 2016.
However, as the
South Sudan market shrinks, the commercial banks in the East
African nation’s biggest economy have sought new business or
scaled up operations in other countries that include Rwanda,
Tanzania, Congo DRC, Malawi, Burundi and Botswana.
Some nine banks have
subsidiaries outside Kenya, with the institutions increasing the
number of the branches to 306 in 2017, up from 297 in 2016, the
latest sector report from the Central Bank showed Wednesday.
From about 40
branches in South Sudan, Kenyan banks now have only 20 branches,
with a majority having closed them down.
Bank (KCB) Group continued to scale down its operations in South
Sudan following the deteriorating security condition that
started in 2016. The bank cut its branch network to 11 from 17
in 2016,” said the report.
Cooperative Bank has
four branches while Equity Bank has five, with the number of
branches by the two remaining flat.
The banks have,
however, spread to Malawi, Botswana, the Democratic Republic of
Congo (DRC) and Burundi, markets that initially looked distant
when South Sudan was promising.
“Equity Bank scaled
up its operations in Congo DRC in 2007 from 31 to 39 branches.
The bank has 79 percent ownership of ProCredit Bank of Congo DRC,”
said apex bank.
I&M Bank Kenya Ltd
and Prime Bank (Kenya) Ltd are the other institutions with
subsidiaries outside East Africa region.
I&M Bank has 50
percent shareholding in Bank One Limited in Mauritius while
Prime Bank acquired 11.24 percent shareholding of First Merchant
Bank Ltd in Malawi and 11.46 percent shareholding of Capital
Bank of Botswana.
Similarly, KCB and
Diamond Trust Bank have each spread their network to Burundi
where they have five and four branches respectively.
“Uganda has the
highest number of branches in the region at 102 compared to 99
the previous year followed by Tanzania at 81 and Rwanda at 55
Equity Bank had the
highest number of branches in the region at 104, followed by
Diamond Trust Bank with 70 and KCB with 60.
number of branches demonstrates potential for banking services
within the region,” the Central Bank said in the Banking
Supervision Report 2017.
employed a total of 6,106 employees compared to 6,223 the
previous year, with the apex bank attributing the decline to
review of business models, automation of processes and shift
from brick and mortar to alternative digital channels.
Gross loans of
subsidiaries stood at 2.86 billion dollars compared 2.42 billion
dollars in 2016 while deposits stood 4 billion dollars compared
to 3.4 billion dollars in the previous year.
“This was as a
result of increased mobilization of deposits especially by
Equity Bank, Bank One, Pro-Credit and Diamond Trust Bank,” said
the apex bank.
subsidiaries registered a slight decrease in total profit before
tax at 87 million dollars compared to 88 million dollars the
The decrease was
noted specifically in two countries Tanzania and Uganda.