Shareholders approve formation of KCB Group Limited

Kenya Commercial Bank Limited shareholders have approved 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 reorganisation 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, KCB Limited 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 new Group holding company will oversee KCB Bank Kenya Limited, subsidiaries in Uganda, Tanzania, Rwanda, Burundi and South Sudan. Also under its watch will be KCB Capital Limited and the bancassurance unit- KCB Insurance Agency Limited.

"The directors of KCB consider that the reorganisation 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 this will result in operational efficiencies and better financial performance of the KCB Group," said Ngeny Biwott- KCB Group chairman.

He made these remarks yesterday while addressing shareholders at the KCB Group's 44th Annual General Meeting (AGM) held at KICC Nairobi.

KCB joins Equity Group and Housing Finance, who have already formed holding companies to manage their diverse business units.

KCB's new structure is expected to increase its access to debt and equity capital while enabling the equity markets to place appropriate value on the group's business separate from the current banking operations to be undertaken by KCB Bank Kenya Limited. The reorganisation effectively separates the banking businesses from other incidental business entities.