Atlas Mara, ABC Holding, and KCB Group have signed a definitive agreement regarding the proposed acquisition of African Banking Corporation Tanzania (BancABC) by KCB.
The sale will be followed by a subsequent merger with KCB’s wholly-owned subsidiary operating in Tanzania, KCB Bank Tanzania.
The joint press release issued by BancABC explains that once implemented, the combined bank is expected to strengthen its financial and regulatory ratios, resulting in a robust balance sheet and capital structure that will support business growth and ensure the banks’ customer base benefits from being a part of one of the biggest banking groups in East Africa.
The transaction is still subject to the meeting of various conditions precedent which, amongst others, include regulatory approvals by the Bank of Tanzania (BoT), competition authorities, and all relevant entities.
BancABC Tanzania operated as a merchant bank since 2002 and introduced retail banking services for corporates and individuals in 2008.
Founded in Kenya, KCB Group has become East Africa’s largest commercial bank, with subsidiaries in Tanzania, South Sudan, Uganda, Rwanda, Burundi and Ethiopia. Today KCB Group Plc has the largest branch network in the region with 360 branches, 1,090ATMs and over 23,230 merchants and agents offering banking services on a 24/7 basis in East Africa.
Following the legal merger of the two banks, the enlarged entity is expected to rank as a top ten bank in Tanzania and will be a wholly-owned subsidiary of KCB Group.
Commenting on the transaction, KCB Tanzania Managing Director Cosmas Kimario, said: “This transaction will allow us to play a greater role in Tanzania’s robust economic growth, using our combined balance sheet to support our corporate customers while leveraging our enhanced distribution network to deepen financial inclusion in Tanzania.”
Imani John, MD of BancABC, said: “Our combined operation will benefit from KCB Tanzania’s strong digital banking capabilities, complementary branch and agent network, and innovative product offering, as well as international banking offerings, leveraging the KCB regional footprint. Our mission to serve and support our customers during this time and to continue to contribute to the economic development of the country will benefit significantly from this proposed merger.”
As of November 2020, there are 49 banks in Tanzania: 38 commercial banks, 5 community banks, 4 microfinance banks, and 2 development banks.
In July 2020, BoT licensed Mwanga Hakika Microfinance Bank (MHB) following the merger between Mwanga Community Bank (MCBL), Hakika Microfinance Bank (HK MFB), and EFC Microfinance Bank.
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