Uganda still remained the home of highest number of branches of Kenyan domiciled commercial banks, according to Oxford Business Group. The country accounted for 102 locations at the start of 2018, followed by Tanzania (81) and Rwanda (55).
The report said increased expansion of Kenyan banks to the East African region is expected in 2019 which would possibly lead to increased performance.
At the start of 2018, nine Kenyan banks operated a total of 306 subsidiaries in EAC up from 297 a year earlier, the report adds.
Equity Bank led in the region with 104 locations in five countries. Diamond Trust Bank (DTB) operated 70 branches in three countries, while KCB group had 60 branches in five member states.
According to the report, this has boosted Nairobi’s status as an advanced financial centre, helping some of larger banks establish a successful presence in regional markets.
Kenyan bankers said they would expand in 2019 despite a rough operating environment in Tanzania and Uganda that saw a 1.01 per cent decline in profit generated from subsidiaries to Ksh8.79 billion in profits in 2017, down from the Ksh8.88 billion in 2016.
The spread of operations to the region is one the market changes that banks have taken for growth away from the challenges posed by interest rate framework.
Meanwhile a proposed merger between NIC Bank and Commercial Bank of Africa (CBA), if successful is expected to gain wider market share with a customer base of 38 million.
This would also mean a shift in position for the CBA which has operations in the region with potential to spread into new markets across the continent.