Kenya’s KCB Group Limited will be the first foreign banking institution to join the Ethiopian financial sector under the government’s liberaliation drive, according to sources at the National Bank of Ethiopia (NBE).
KCB executives and NBE regulators are discussing the requirements the bank will need to fulfill before expanding its business to Ethiopia, the sources told The Reporter, adding they expect the Kenyan banking giant to begin laying the foundations for its entry “in the near future.”
The Banking Business Proclamation amended by lawmakers in November 2024 permits foreign banks to enter in one of four ways. They can incorporate a subsidiary in Ethiopia, buy stakes in a domestic bank, establish a local branch office, or open a representative or liaison office. The law caps foreign investment in a bank at 40 percent ownership, while a domestic bank cannot sell more than 49 percent of its authorized shares to foreign investors.
In an interview with 1st Afrika last month, KCB Group CEO Paul Russo said Ethiopia’s large and financially underserved population make it an appealing prospect despite the limits on foreign ownership in banks.
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The Group operates a number of wholly or majority-owned subsidiaries in Kenya and elsewhere in Africa, including Rwanda, Uganda, Tanzania, Burundi, and South Sudan. It reported more than USD 1.5 billion in revenues and USD 478 million in net profit in 2024.
