24 April 2014

Kenya: KCB Hit As South Sudan War Hinders Trade in Juba

THE on going violence in parts of South Sudan will prolong the closure of some of Kenya Commercial Bank's branches, the biggest financier in that country with 21 branches.

KCB said its branches in hard hit Bentiu, Bor, Malakal and at the Malakal UN Mission will remain closed as it monitors the security situation. "We continue to monitor the situation with our team on the ground and are optimistic that peace will prevail," the bank told the Star.

The UN reported that hundreds of civilians have been killed over the last few days in inter-tribe fighting, leaving many corpses on the streets of Bentiu.

KCB which has 50 per cent market share in South Sudan said its subsidiary in that country contributed 9.4 per cent of its profit before tax for 2013 which stood at Sh20.12 billion.

KCB South Sudan is the bank's second best in profitability across the group with its assets attributing to 10.7 per cent of the entire group's asset value. It also accounted for 10 per cent of the bank's revenue last year.

Cooperative Bank Kenya which started operations in South Sudan in September said its business in Juba is operating normally "albeit with subdued activity."

"All our staff are safe and we remain open," said Coop Bank. CIC Insurance group said its operations in Juba have not been affected at all adding that security has been beefed up in the South Sudan capital making it very safe for business. The insurance company however added that demand for political risk covers in that country is increasing.

Though other private insurance companies are offering covers South Sudan, the country is yet to ratify its treaty with the Africa Trade Insurance company- the biggest regional insurer for political and trade risk covers.

This has led to the company rejecting major companies seeking covers for their businesses in South Sudan. "The president signed the treaty in 2013 but we are now waiting for them to ratify it and to pay for the subscribed shares for the required capital of $25 million," said ATI chief executive George Otieno.

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