KENYA – KCB Group, a financial service holding company, has obtained a loan of US$150 million (KSh18 billion) from the International Finance Corporation (IFC) to support its lending to eco-friendly ventures.

IFC disclosures on the new credit line say the new facility will have a maturity of seven years, with a grace period of two years, and will also include the institution providing back office support to KCB on green finance strategy.

The new loan will take KCB Group’s total borrowings from IFC to KSh45 billion, with the lender having already held two other loans worth a combined KSh27 billion (US$225 million) taken up in 2018 and 2020.

“The proposed project consists of a US$150 million senior unsecured loan to KCB Bank Kenya Limited. The proceeds will support the growth of the bank’s climate finance portfolio…the project builds on prior and new Climate Advisory Services (AS) engagements, which serve as an anchor for the bank’s strategic commitment to deepen its participation in this under-served segment,” said the IFC.

“The scope of IFC’s Climate AS will include input to KCB’s climate finance strategy, knowledge, and capacity building, and climate risk assessment and reporting.”

Existing KCB Kenya loans with the IFC comprise a 10-year, US$150 million loan issued in 2020 at Libor plus 5.15 per cent per annum, and a seven-year, US$75 million (KSh9 billion) loan issued in 2018 at Libor plus 5.3 per cent.

These older loans will, however, need to be repriced now that the Libor benchmark has been phased out.

KCB raises stake in Rwandan subsidiary

KCB Group has raised its stake in its Rwandan subsidiary by an additional 10.8 per cent to 87.5 per cent after merging KCB Bank Rwanda and Banque Populaire du Rwanda (BPR) in May, report

The Kenyan banking multinational bought a 62 per cent stake from London-based Atlas Mara Limited and another 14 per cent from private equity firm Arise in a deal that was closed last year and had set sights on sweeping the remaining 24 per cent owned by minority owners.

KCB also received regulatory approval in March from Rwanda’s banking regulator, the National Bank of Rwanda (BNR), to merge the operations in the country, resulting in a higher stake courtesy of the injection of the assets of KCB Rwanda into the merged entity that is trading under the name BPR Bank Rwanda Plc.

It also points to a dilution of the stake held by the minority shareholders, whose 24 per cent stake post takeover has now shrunk to 12.5 per cent.

KCB disclosed the higher stake in the Rwanda subsidiary through a circular that it sent to shareholders detailing its proposed takeover of Democratic Republic of Congo lender Trust Merchant Bank.

“In May 2022, we successfully launched our new bank – BPR Bank Rwanda PLC resulting from the amalgamation of Banque Populaire du Rwanda and KCB Bank Rwanda. This merger catapulted our business to become the second largest bank in Rwanda,” KCB said in a press release.

The lender estimated at the time of the takeover that a full buyout of BPR would cost it an estimated KSh6.4 billion (US$53.22m) if minority investors were offered the same terms as Atlas Mara which was paid KSh3.96 billion (US$32.93m) for its 62 per cent stake. Atlas Mara will get an additional KSh314 million (US$2.61m) which has been deferred.

The acquisition gave KCB a larger retail banking footprint in Rwanda. BPR had a 10.2 per cent market share ahead of the merger, which combined with KCB Rwanda’s six per cent share saw it overtake second-placed Equity Bank Rwanda’s 11 per cent of the market.

Bank of Kigali is the biggest lender in Rwanda with a 37.8 per cent stake.

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