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Kenyan banks flourish despite S Sudan upheaval

Author : | Published: Monday, August 8, 2016

The Central Bank of Kenya says its subsidiary banks made more profits in South Sudan than in other countries of the region in this financial year.

Kenyan subsidiary banks in South Sudan include the Equity Bank and Kenya Commercial Bank.

They operate in Uganda, Tanzania, Burundi, Rwanda and South Sudan.

The Kenyan Central Bank says it made close to 30 million US dollars in South Sudan.

Data compiled by Central Bank of Kenya shows subsidiaries operating in South Sudan have accounted for 33 per cent of the total profits, although only three banks have operations there.

The report state that the 8.4 billion Shilling profit before tax that the banks got from subsidiaries in Uganda, Tanzania, Burundi, Rwanda and South Sudan, about 2.8 billion Shilling was realized from South Sudan.

The report says this demonstrates good business potential in South Sudan despite the volatile political environment that has made the business situation tough.

However, it says assets held by subsidiaries of Kenyan banks in South Sudan declined by half from 117.7 billion Shilling in 2014 to 58.8 billion Shilling in 2015.

“This reduced the asset contribution of Kenyan banks in South Sudan compared to all cross-border operations from 25.2 per cent in 2014 to 13.8 per cent in 2015,” said CBK report.

Tanzania, which has attracted seven banks with a branch network of 96, accounted for 26.9 per cent that is 2.3 billion Shilling of the gross profit from subsidiaries.

Rwanda, which has four Kenyan banks running 55 branches, made only 1.8 billion Shilling.

The data shows three subsidiaries registered losses in various countries in the region compared to four in the previous year.

According to the report, Equity Bank has beaten Kenya Commercial Bank and Barclays on investor returns this year.

The data shows two of the subsidiaries registered losses before tax in Uganda, due to stiff competition.

IT states that this was mainly due to a drop in the value of South Sudanese Pound.

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