KCB Group CEO Paul Russo says the bank is still interested in expanding into Ethiopia even though the country has set a 49 percent cap on foreign ownership in local banks. Russo noted that Ethiopia offers huge potential for growth due to its large population and underserved banking sector.
Ethiopia recently opened its banking industry to foreign investors for the first time. However, the country has limited foreign banks to owning a maximum of 49 percent in any local institution. This means a Kenyan bank like KCB cannot have full control over an Ethiopian bank but must instead work through partnerships or joint ventures.
Despite this limit, Russo said KCB is studying the best way to enter the market. He added that KCB is not just looking at short-term profits but long-term opportunities. The bank is currently reviewing laws, talking to regulators, and preparing a strategy that fits within the Ethiopian rules.
The move to open up Ethiopia’s banking industry is part of broader economic reforms aimed at attracting foreign investment. Other Kenyan banks like Equity Group and Co-op Bank have also shown interest in entering the Ethiopian market.
Russo said that although KCB prefers having majority control where it invests, the bank is willing to adjust its model to tap into Ethiopia’s growing economy. He emphasized that it is better to have a presence in a high-potential market with some restrictions than to miss out completely.
If KCB succeeds in its plans, it could become one of the first foreign banks to set up operations in Ethiopia. That would give it a head start in a market that is expected to grow rapidly as more people seek banking services.
