KCB group (NSE:KCB) revealed plans to open a representative unit in China as it aims to benefit from increased trade ties between China and African countries especially, Kenya.
China is the largest importer into Kenya with 2018 imports roughly valued at KSh372 billion ($3.72 billion). The Asian nation also has close ties with African countries such as Rwanda, Zambia, and South Africa.
KCB’s Chief Finance Officer Mr. Lawrence Kimathi said, “We hope to use the office to lower cost of transactions between the Chinese and East African business community by enabling payment for imports and exports in local currencies”.
The Bank also plans to incorporate the Yuan in all its subsidiaries in and out of Kenya. Growing ties between China and Africa have led to an increase in the demand for Chinese currency. Having the Yuan will significantly lower the cost of transactions for African and Chinese traders. It will eliminate foreign exchange expenses incurred while trading in US dollars.
The lender currently operates in Kenya, Tanzania, Uganda, Rwanda, Burundi and South Sudan. It has plans to start a unit in Ethiopia, East Africa’s fastest growing economy. In 2018, the regional subsidiaries largely contributed to the bank’s high net earnings which amounted to KSh24 billion. According to Mr. Lawrence, the bank is negotiating with government officials in China and they expect to start operating in the country by June 2019.
