KCB Group closed 31 branches in Rwanda in the six months ended June 2024, on a shift to agency banking and as a consolidation strategy following the acquisition of Banque Populaire du Rwanda (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 born out of the merger of BPR with KCB Bank Rwanda —the initial entity it had in Rwanda— closed 18 branches in three months ended June 2024, adding to 13 it had closed in the first quarter of the year.
The move left BPR Bank Rwanda with 112 branches by the end of June, down from 130 in March and 143 in December 2023.
The fall in branches has come with a decline in the number of employees serving the Rwandan unit. In the three months to June 2024, the headcount in Rwanda dropped by 82 to 1,035. KCB had also cut the headcount in the unit by 71 in three months to June 2023.
KCB Group chief executive officer Paul Russo said the reduction in branches is due to increased switch to agency networks and the need for consolidation to bring efficiency in the subsidiary’s operations.
“By merging those two entities, deploying a common platform of banking and deploying agency banking similar to what is in Kenya the natural thing to do is to reduce the branch network,” said Mr Russo in response to this publication’s questions.
“The more we embed our agency banking in that market, and sufficiently be able to cater for some of those customers, the physical branches will reduce. Also, most of those branches were owned by the bank (BPR) and so it is also about getting out of those fixed assets we own.”
In 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.
KCB Group had 13 branches under KCB Bank Rwanda but this moved to 154 on acquiring BPR and merging the two entities into BPR Bank Rwanda Plc. This means that the group has cumulatively shut 42 branches since merging the two entities.
The group in August 2021 acquired a 76.67 percent stake in BPR and amalgamated 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 most branches followed by the DRC Congo unit at 108. The group has 17 branches in Tanzania, 15 in South Sudan, 13 in Uganda, and seven in Burundi.
