NAIROBI, July 27 (HANA)--Kenya's biggest retail bank, Kenya Commercial Bank (KCB), is seeking regional expansion as it moves to meet the immense demand for banking services in the Eastern Africa, bank executives said on Thursday.
KCB deputy chief executive, Martin Oduor-Otieno said the bank, which early this year opened two subsidiaries in southern Sudan, plans to spread its wings to neighboring in Uganda in 2006/07 and Rwanda in 2007/08.
“We are repositioning our business in Tanzania and over the next few years intend to establish our presence in Uganda and Rwanda,” Oduor-Otieno said during the launch of Islamic banking brand, The KCB Amana Account” in Nairobi.
The Amana Account is a Shariah compliant banking service, which has been tailor made to meet and satisfy the needs of the bank’s shareholders and customers.
“Our entry at this juncture is timely with the strengthened Islamic financial infrastructure now being put in place. The Islamic financial services industry is poised to accurate regional economic growth,” Oduor-Otieno said.
The Amana Account which is not exclusive to Muslims only but also open to non-Muslims will ensure no interest is charged or paid out to customers who will operate in both local and major currencies.
Oduor-Otieno also said the bank plans to open two branches soon in southern Sudan’s remote western towns of Yei and Yambio close to the border with the Democratic Republic of the Congo (DRC).
In May this year, KCB opened its first branch in Juba, the capital of southern Sudan, making history as the first international bank to set shop in the vast region.
In June, the bank also opened another subsidiary in Rumbek, which serves as the headquarters of the United Nations and various aid agencies working in southern Sudan.
The opening of operations in Juba and Rumbek ended speculation that the grand entry into vast region was facing problems and could be headed for failure, the KCB deputy chief executive officer said.
He said business opportunities have sprung up in the bombed-out capital of South Sudan, increasing the demand for banking services.
'KCB Sudan has two branches, in Juba and Rumbek and has plans to expand to other viable business centers of Southern Sudan such as Yei and Yambio in a short period of time to come,' said Oduor-Otieno said.
The Kenyan indigenous bank, which already has another subsidiary in Tanzania, is now one of the only two banks operating from the region, the other being Nile Commercial.
The bank officials acknowledged that the bank would face challenges in Southern Sudan especially due to the 'fragility of the legal and regulatory framework.'
'As part of this strategy, KCB is exploring the prospects of establishing other subsidiaries in Uganda, Rwanda and possibly, Burundi,' he added.
'This is very exciting news for us. It also marks a major step in our efforts to increase our footprint in the region and grow the KCB group business. With our presence in Tanzania where we installed a new managing director recently and the licensing of KCB Sudan, we are set to become a major player in the regional banking scene,' he said.
The bank's officials acknowledged that services such as provision of loans would require time to develop modalities especially under conditions that would-be borrowers may not have collateral for loans. Enditem
