Out-Law / Your Daily Need-To-Know

Kenyan bank ‘planning joint ventures to expand operations across Africa’

24 Mar 2015, 4:43 pm

The Co-operative Bank of Kenya (CBK) plans to expand its operations into Uganda, Rwanda, Tanzania and Ethiopia by the end of 2016, according to the bank’s managing director.

Gideon Muriuki told an investor briefing in Nairobi that the CBK “will enter these countries through joint ventures with the local co-operative movement”, China’s state-run Xinhua news agency reported.

According to Xinhua, Muriuki said: “We are currently holding discussions with the governments with a view to acquiring operating licences.” Joint ventures offer “great opportunities for long-term sustainability of the business”, Muriuki said.

The CBK said in its 'Co-op Bank Transformation' report, released earlier this year, that figures from the Kenya National Bureau of Statistics showed the country’s banking and insurance sector grew by 9.9% in the third quarter of 2014. The CBK said it expected the sector “to expand further in 2015, providing good returns to the group”.

The CBK, which said it is Kenya’s third largest bank by asset size of 270 billion Kenyan shillings ($2.9bn), was initially registered under Kenya’s Co-operative Societies Act when it was founded in 1965. The bank went public and was listed on the Nairobi Stock Exchange in December 2008.

Sectors in which the CBK said it expects to provide development finance during 2015 include energy and infrastructure projects, “especially road construction”.

The Kenyan government’s Vision 2030 programme has identified infrastructure as an “enabler of Kenya’s transformation”, such as the completed Thika Superhighway, designed to boost trade in the East African region, and the $325 million greater Nairobi commuter rail project, including laying new track to link Jomo Kenyatta International Airport (JKIA) with the Nairobi central business district.

A report from the World Bank Group, published last month, said infrastructure investment in Kenya is “moving in the right direction” and is now second only to education expenditure. According to the Kenya Public Expenditure Review for December 2014 (88-page / 6.41 MB PDF), released on 4 February, spending on infrastructure and devolution of functions from the national government to counties are “key factors contributing to the transformative impact” on the country.