Nigerian Guaranty Trust Bank (GTB) Group has increased its shareholding in the Kenyan subsidiary by 5.89percent, signifying the rising competition for the East African market by lenders from the west Africa nation.
Nigerian Pan-African banking groups —Access Bank, United Bank for Africa (UBA), and the Guaranty Trust Bank (GTB) are positioning themselves to control Africa’s links to the global financial gateways in India, Dubai, and China and to secure lucrative trade financing deals, offered by the continent’s 1.3 billion free market under the African continental free trade Area (AfCFTA).
GTB’s financial disclosures for the six months ended June 30 show the lender raised its stake in the Kenyan unit to 76.9 percent from 71.01 percent at an undisclosed price.
This is coming at a time when Access Bank Group is in the tail-end of completing its buyout of the National Bank of Kenya (NBK), its second acquisition in Kenya after taking over the transnational bank in 2020.
It is also in the process of acquiring an 80 percent stake in Uganda's Finance Trust Bank Ltd.
Access Bank says it is seeking to deepen its retail banking presence in Africa and expand the trade and correspondent banking capabilities of its international subsidiaries, including the initiation of banking operations in global trade hubs outside Africa as part of its five-year strategic plan (2023-2027).
It operates 14 subsidiaries within West Africa, East Africa, Southern Africa, and the United Kingdom and also has business offices in the Republic of China, Lebanon and India, with Access Bank (UK) Ltd operating branches in the United Arab Emirates (UAE), and Paris as well as a restricted license in Hong Kong.
United Bank for Africa (UBA), on the other hand, acquired an additional 13 percent and 11 percent stakes in UBA Kenya Ltd and UBA Uganda Ltd, respectively in 2022 ,signaling the growing appetite by Nigerian lenders for investment in the East African market with more than 300 million people.
The share sale increased UBA Plc’s shareholding in the Kenyan and Ugandan units from 81 percent and 69 percent to 94 percent and 80 percent respectively, according to the lender’s annual report (2023).
UBA Plc which operates in 20 countries across Africa, the United Kingdom (UK), France, and the United Arab Emirates (UAE) provides corporate, commercial, Small and Medium-sized Enterprises (SMEs) and consumer banking services to more than 35 million customers globally.
GTB group extended regional presence in Africa acquiring a 70 percent stake in Fina Bank Ltd in December 2013, a commercial bank incorporated in Kenya with subsidiaries in Uganda and Rwanda.
GTB group has operations in Gambia, Sierra Leone, Ghana, the UK, Liberia, Cote D’Ivoire, Kenya, and Tanzania. It also has an indirect investment in Guaranty Trust Bank Rwanda Ltd at 67.2 percent and Guaranty Trust Bank Uganda Ltd at 70 percent.
Market dynamics within the East African banking market are however changing fast with the admission of the Democratic Republic of Congo in the regional bloc in 2022, which aroused the interest of several lenders in the mineral-rich Central African nation.
Latest Central Bank data shows Kinshasa has overtaken Rwanda as the most profitable market for subsidiaries of Kenyan banks within the EAC, with the pre-tax profit realised in DRC by subsidiaries of Kenyan banks more than doubling to Sh66.13 billion in 2023 from Sh32.51 billion in 2022.
The DRC market contributed the highest proportion of the total earnings by Kenyan banks’ regional subsidiaries, equivalent to 45.52 percent (Sh30 billion).
Subsidiaries in Rwanda and Uganda contributed 20.89 percent and 13.45 percent of the total profits respectively, while subsidiaries in Tanzania contributed 8.53 percent.
