Kenya-based giant lender KCB will be getting access to service clients in Japan after reaching an agreement with the Sumitomo Mitsui Banking Corporation (SMBC), a multinational banking and financial services company in Tokyo. The deal is aimed at driving cross-border trade between both countries.
The pact between the two banks, reportedly the largest in their respective regions, was signed on the sidelines of the 7th annual SMBC Africa Summit held in Yokohama last week. It will see both lenders expand their financial offerings provided to clients in both East Africa and Japan, thereby enabling more cross border trade flows.
“We believe that new business opportunities will arise from the rapid economic development in Kenya and therefore seek to areas of mutual partnership to support such development, utilizing the product capabilities and global and local network of both banks,” KCB’s Group Director for Regional Businesses, Paul Russo said in a statement yesterday.
Under the deal, KCB will provide banking services such as banking accounts and cash management, trade finance, export credit agency finance, and treasury-related products to clients introduced to it by SMBC. Russo added KCB expects to “open up the East African market to the Asian market especially in the trade and motor vehicle industry.”
For KCB, gaining such access to serve the Japanese market is a major step in its expansion drive. News of the partnership with SMBC comes just a week after the Central Bank of Kenya approved the takeover of state-owned National Bank of Kenya (NBK) by KCB Group.
In a statement, the apex bank had said the acquisition will “strengthen both institutions leveraging on their respective well-established domestic and regional corporate, public sector and retail franchises.” Partnering with SMBC now positions the bank for a major expansion of portfolio and an increase its global business operations, Russo added.
On the other hand, the deal will further strengthen SMBC’s coverage in Africa. According to the Managing Executive Officer & Head of EMEA Division at SMBC, Tetsuro Imaeda, cooperating with local financial institutions in Africa is “indispensable” for the giant Asian lender to expand its Africa business and responding to customer needs.
“By signing the agreement between one of our most important partners in Africa, KCB, SMBC will be able to support our client’s business to East Africa through (a) wide range of coverage of KCB in the areas and expects to further strengthen (the) existing strong relationship,” Imaeda added.
KCB Group is a Kenyan non-operating holding company that owns banking subsidiaries in the East African region. In addition, the Group owns non-banking subsidiaries including KCB Insurance Agency, KCB Capital, and KCB Foundation. KCB Group oversees operations of KCB Bank Kenya Limited and all other subsidiaries
The bank works with several multinational companies in different industries and hopes to use the collaboration with SMBC to expand its play in facilitating business in Africa. Apart from Kenya, the lender currently has operations in Tanzania, South Sudan, Uganda, Rwanda, Burundi, with a representative office in Ethiopia.