Kenya’s KCB Group has disclosed plans to inject about $31 million (Sh4 billion) into its Tanzanian subsidiary to strengthen its thin capital buffer and accelerate growth.
The recapitalisation will be funded using part of the $110 million (Sh14.2 billion) proceeds from the sale of National Bank of Kenya (NBK) to Nigeria’s Access Bank, Paul Russo, Group CEO, said on Monday.
The Dar es Salaam unit, which operates with a capital ratio of 14.9%—just 0.4 percentage points above the regulatory minimum—has faced constraints in expanding its loan book.
The fresh capital is expected to lift its standing into Tanzania’s top five lenders from its current tenth position, where it manages assets of $666 million (Sh86 billion).
“If you look at KCB Tanzania’s full-year performance, profit went up by 20%,”Russo said in an earlier interview. “With additional funding, it can generate much more, probably upwards of about Ksh4bn ($31 million) in profit. So we have to fuel some of our businesses.”
KCB Tanzania delivered strong results in 2024, posting revenues of $48.6 million and profit of $20 million, making it one of the group’s largest contributors outside Kenya.
Under terms of the NBK sale, 20% of proceeds, amounting to $22 million (Sh2.8 billion), remain in escrow pending settlement details, while $49 million (Sh6.3 billion) will be distributed as a special dividend.
The bank also declared a Sh4 ($0.03) per share payout split evenly between an interim dividend and a special distribution, underscoring a more generous shareholder return policy.
The expansion push in Tanzania comes as Kenya’s second-biggest bank explores a possible entry into Ethiopia.
Russo said the lender is weighing an acquisition of a local bank but may seek an exemption from foreign ownership limits that cap overseas stakes at 49%.
He added that the group was in talks to identify a suitable partner before approaching Ethiopia’s financial regulators.
KCB already operates in South Sudan, Uganda, Rwanda, Burundi and the Democratic Republic of Congo, consolidating its position as one of East Africa’s largest regional lenders.
The bank’s latest move highlights growing competition in Tanzania’s banking market. Equity Group, Kenya’s largest lender and KCB’s major rival, had earlier in the month revealed plans to channel up to $20 million into its Dar es Salaam unit in 2025 to support growth.
Analysts say the country’s appeal to regional lenders stems from its strong economic outlook and its links to the $2.3 billion Lobito Corridor railway project, designed to give landlocked mineral-rich economies access to global markets.
Tanzania’s economy expanded 5.4% in 2024, outpacing Kenya’s 4.7% growth.
NB: The financial figures have been converted using Sh129.2/$1 as of August 20, 2025.
