, NAIROBI, Kenya, May 15 – Kenya Commercial Bank Limited (KCBL) shareholders have approved the formation of KCB Group Limited , a non-operating holding company that will own the Bank and all its other interests including regional subsidiaries.
Subject to regulatory approvals, the reorganization exercise will see KCB Limited, the current company; transfer its banking business to a new subsidiary, KCB Bank Kenya Limited.
Following the transfer of assets and liabilities, KCBL will remain as a non-operating holding company approved to operate as such by the Central Bank of Kenya, and subsequently renamed KCB Group Limited.
“The directors of KCB consider that the reorganization and implementation of a non-operating holding company is in the best long-term interests of shareholders and of the KCB Group as a whole. We believe that this will result in operational efficiency and better financial performance of the KCB Group,” KCB Group Chairman Ngeny Biwott said.
The new Group holding company will be mandated to oversee KCB Bank Kenya Limited, the regional Banking units in Uganda, Tanzania, Rwanda, Burundi, and South Sudan and two more existing subsidiaries—the investment banking arm, KCB Capital Limited and the bancassurance unit, KCB Insurance Agency Limited.
“Given our size and strength, we also see the implementation of the new structure as promoting the Vision 2030 initiative towards a Nairobi International Finance Center, the regional hub for financial services that is expected to encourage foreign direct investment into the country and the region”, he said at the lender’s Annual General Meeting held in Nairobi.
During the AGM, shareholders also approved the dividend payment of Sh2 per share held riding on improved earnings in the past financial year. The books close on May 19, 2015.
The changes come following new CBK guidelines that allow non-financial entities to own over 25 per cent of the share capital of a Bank in a bid to spread risks associated with subsidiaries and associated companies
“The new units will be able to operate independently while being supervised by the mother company to ensure that the activities are run according to the laid down practices and move towards remarkably boosting the bank’s financial performance,” Biwott said.