ADDIS ABABA — Kenya Commercial Bank (KCB) is in negotiations with Ethiopia's central bank to acquire a stake in a local financial institution, CEO Paul Russo revealed in an interview with The Africa Report.
Paul, who had earlier told The Ethiopian Herald in May that Ethiopia's financial sector was undergoing "visible transformation," reaffirmed his bank's interest in expanding into one of Africa's most closely watched markets.
The CEO said KCB is exploring the possibility of entering Ethiopia through an acquisition, while weighing an application for exemption from Ethiopia's foreign ownership rules. "Whenever a market like that opens, getting an exemption is not difficult," he said, expressing optimism.
He noted that KCB is still searching for a willing local partner before formally approaching the National Bank of Ethiopia. "We have to work it out, and if it requires an exemption, there must be a party ready to walk with us," Paul added, hinting that Nairobi's diplomatic support could be sought if necessary.
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Ethiopia recently opened its financial sector to international players, with new rules capping foreign ownership at 49% while requiring Ethiopian nationals to retain majority control. In June 2025, the National Bank of Ethiopia announced that foreign investors could apply for banking licenses for the first time.
For KCB, the move aligns with its strategy to strengthen regional leadership. Its subsidiaries outside Kenya contributed 36.6% of group profit after tax and 34% of total assets in the nine months to September 2024, up from less than 5% a decade ago. The bank reported an 8% rise in net profit in the first half of 2025, reaching 250 million USD.
Ethiopian economist Zemedeneh Negatu, Chairman of Fairfax Africa and CEO of CBE Capital, listed KCB among strong African banks that could serve as benchmarks for Ethiopian banks preparing for the Ethiopian Securities Exchange. He highlighted leading African institutions including Standard Bank (South Africa) with a market capitalization of 23 billion USD, Attijariwafa (Morocco) with 16.8 billion USD, KCB (Kenya) with 1.4 billion USD, and UBA (Nigeria) with 1.28 billion USD.
According to Zemedeneh, Ethiopian banks stand to benefit significantly by going public, with valuations potentially reaching hundreds of billions of Birr over time.
