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KCB downplays performance hit from Congo war
From left: Kenya Commercial bank (KCB) Group CEO Paul Russo, Group Chairman Dr Joseph Kinyua and Group Finance Director Lawrence Kimathi pose during the banks Financial Year (FY) 2024 Results announcement at Radisson Blu Hotel on March 12, 2025.
Photo credit: Francis Nderitu | Nation Media Group
KCB Group has downplayed the impact of the ongoing conflict in the eastern Democratic Republic of Congo (DRC) on its business performance, saying the restive region only accounts for 10 percent of the earnings of its subsidiary there.
The mineral-rich east of the DRC is presently under conflict after fighters from the M23 rebel group advanced quickly and captured Goma city in North Kivu on the border with Rwanda last January. The rebels have since seized another key town in the region, South Kivu’s capital Bukavu.
KCB Group has a presence in the conflict-hit region through its subsidiary Trust Merchant Bank (TMB).
“Two major towns are affected, Goma and Bukavu. Within those regions, we have 15 branches and those have technically been closed for the last two months because my first responsibility is the safety of customers and staff” KCB Group chief executive Paul Russo told the Business Daily.
“Eastern DRC contributes ten percent of the performance of TMB. From a financial performance standpoint, you can say we will be fine.”
TMB is KCB Group’s second largest subsidiary after KCB Bank Kenya, accounting for 13.6 percent of the lender’s total assets (Sh268billion), 15 percent of its total deposits (Sh225 billion), 16 percent of its total income (Sh30.67 billion), and 16percent of net earnings (Sh10.43 billion).
Going by the earnings means that KCB risks losing Sh1.4 billion if the TMB business is crippled by the conflict.
KCB Group completed the acquisition of TMB in December 2022 following the purchase of an 85 percent stake worth Sh15 billion.
Security has, however, deteriorated in eastern DRC since the start of 2025, following the rapid escalation of fighting between Congolese security forces and the M23 rebels who have also taken over other towns, including Masisi, Rutshuru, and Katale.
Mr Russo said the KCB board has commissioned a special evaluation of the evolving risks and potential business hits in the DRC market. Apart from the DRC, the KCB Group board wants risk and business impact assessment in Burundi and South Sudan where it also has a presence.
“We have a formal evaluation of three markets – DRC, South Sudan, and Burundi. We have hyperinflation in South Sudan and we believe Burundi will also go into hyperinflation”, said Mr Russo.
Ever since its acquisition, KCB has been keen to leverage relatively strong US dollar deposits in the TMB subsidiary to facilitate hard currency syndicated financing (that is, credit arrangements that involve more than one subsidiary) and meet the growing demand for non-local currency-denominated financing in the region.
So far, the group reports that a major syndicated arrangement between KCB Kenya and TMB has been concluded in the cement sector. In 2024, the lender adopted a Group Treasury function to strengthen the capacity for such syndicated financing.
