KCB Group closed 31 branches in Rwanda in the six months to June 2024, as part of a shift to agency banking and a consolidation strategy following the acquisition of the Bank of the Rwandan People (BPR), which was later merged with an existing subsidiary in the same market.
The lender’s latest disclosures show that BPR Bank Rwanda Plc, the entity resulting from BPR’s merger with KCB Bank Rwanda – the initial entity it had in Rwanda – closed 18 branches in the three months ended June 2024, in addition to the 13 branches it closed in the first quarter of the year.
With this move, the number of BPR Bank Rwanda branches decreased to 112 by the end of June, compared to 130 branches in March and 143 branches in December 2023.
The reduction in the number of branches was accompanied by a reduction in the number of staff serving the Rwandan unit. In the three months to June 2024, the number of staff in Rwanda decreased by 82 to 1,035. KCB also reduced the number of staff in the unit by 71 in the three months to June 2023.
KCB Group CEO Paul Rousseau said the reduction in branch numbers was due to the increased shift to agency networks and the need to consolidate to achieve efficiencies in subsidiary operations.
“By merging these two entities, deploying a common banking platform and deploying agency banking services similar to what is in place in Kenya, the natural thing to do is to reduce the branch network,” Mr. Rossouw said in response to questions from this publication.
“As we become more established in that market, and as we are able to adequately cater to some of those customers, the number of physical branches will decrease. Most of those branches were owned by the bank (BPR), so it is also about getting rid of those fixed assets that we have.”
In the three months to June 2024, KCB opened 92 new agency outlets in Rwanda, taking the number to 734 from 642 in a market the lender says has 436,000 customers.
The KCB Group had 13 branches under KCB Bank Rwanda, but this number increased to 154 branches after the acquisition of BPR and the merger of the two entities into BPR Bank Rwanda Plc. This means that the group has closed 42 branches since the merger of the two entities.
In August 2021, the group acquired a 76.67 percent stake in BPR and merged it with KCB Bank Rwanda to form BPR Bank Rwanda, which became the second largest bank in Rwanda with a market share of about 17 percent. The deal cost KCB about Sh4.85 billion.
Outside Kenya, Rwanda remains the subsidiary with the largest number of branches, followed by the Democratic Republic of the Congo unit with 108 branches. The group has 17 branches in Tanzania, 15 branches in South Sudan, 13 branches in Uganda and seven branches in Burundi.