[2008-07-23]  KCB shops for manager for Rwanda subsidiary
KCB Bank entry into Rwanda began to take shape yesterday after the bank started a search for a managing director for the subsidiary.

The bank put out an advertisement in the press calling on interested persons to place their applications for the position before August 8 as it races to set up three branches in Rwanda before the end of the year.

This is barely a month after Rwandan authorities gave the bank the greenlight to set base in that country, as it pushes a regional expansion strategy that has seen it start operations in Tanzania, Uganda and Southern Sudan.

The bank is also eyeing the Burundi market where it intends to open shop in 2009.

“We are a regional bank and we want to complete the cycle, with Rwanda being part of this journey,” Mr Martin Oduor-Otieno, the bank’s chief executive officer told Business Daily in an interview yesterday.

Currently, foreign subsidiaries account for about six per cent, but Mr Oduor-Otieno said the bank expects to draw a huge fraction of its business from the subsidiaries in the coming five years.

The Tanzanian outfit, which has been struggling since it opened doors, has since turned around, while the Southern Sudan branch has also began to get positive results.

The bank is planning to open five more branches to consolidate its gains in that market. The Rwanda market is particularly important given that Kigali is emerging as Kenya’s trading partner, with the bank expecting to benefit from increased business activity in the region, which is set to grow further as the East African Community (EAC) takes shape. Rwanda is the latest country to join the EAC trading block that includes Burundi, Tanzania, Uganda and Kenya.

As a result, KCB is increasingly looking at the growing customer base, with business interests in Tanzania, Uganda and Kenya.

“We want to serve our customers who are increasingly doing business across the region,” said Mr Oduor-Otieno. The bank will be following in the footsteps of Fina Bank, which made an entry into the Rwandan market upon acquiring BACAR from the Rwandan government.

Barclays Bank is also working on a buyout that will see it acquire at least 70 per cent shares of Banque de Kigali from the Rwandan market.

The interest from the Kenyan banks comes at a time when a number of international financial institutions have shown interest in getting a share of the lucrative Rwanda banking market.

Four financial institutions, including Actis, Fina Bank, Nigerian Access Bank and Ecobank have entered the market, all through acquisitions.

Analysts have attributed the sudden surge in acquisition by the international banks to the growth opportunities in the Rwandan market because of the country’s rapid economic growth and few players in the industry.

“There is plenty of room for profit growth in the Ugandan banking market compared to the Kenyan market,” said Abdi Hassan, the investment manager at Stanbic Investment Management Services. Rwanda’s banking sector has six commercial banks compared to Kenya’s 45.



Source: standard