Diamond Trust Bank Kenya Limited (DTK) has announced a significant strategic shift, agreeing to sell its entire stake in its Burundian subsidiary to a consortium of local investors. The move signals the bank’s intention to consolidate its operations and focus on its core markets in East Africa.
The planned sale of DTB Burundi follows a conditional agreement signed with a group of primarily Burundian-based investors, which includes the subsidiary’s existing minority shareholder. The DTB Kenya sells Burundi subsidiary transaction will see the Nairobi Securities Exchange-listed bank divest its 83.67% controlling shareholding.
The sale was initiated following an expression of interest from the existing minority shareholder to increase its stake, which evolved into an offer from a broader consortium.
In a statement, DTB Group Chief Executive Officer Nasim Devji said the decision aligns with a strategy to concentrate resources on Kenya, Uganda, and Tanzania. She described the offer from the consortium as representing “a fair value and return on investment.”
“The Board has reviewed the offer from the consortium and our long-standing partner in Burundi and considers that it represents a fair value and return on investment for DTB,” Mrs Devji stated.
The bank first entered the Burundian market 16 years ago, establishing a footprint as part of a broader financial inclusion agenda. Mrs Devji emphasised that the bank will be “leaving behind a stable, well-managed financial institution.”
The decision to exit Burundi underscores a trend among regional banking groups to streamline operations and enhance profitability in their most established markets. For DTB Group, which is part of the larger Aga Khan Fund for Economic Development (AKFED) network, Kenya, Uganda, and Tanzania represent its largest and most mature operations.
The announcement was made through a mandatory Cautionary Announcement issued by DTB Kenya’s Company Secretary, Stephen Kodumbe, to the Nairobi Securities Exchange and the investing public.
A key aspect of the agreement, as highlighted by Mrs Devji, is the commitment from the incoming Burundian owners to continue the bank’s existing mission. The consortium has pledged to maintain and even accelerate the bank’s financial inclusion agenda, which aims to provide banking services to underserved populations.
“The consortium has committed to maintaining and further lifting the bank’s financial inclusion agenda on an already established platform of good governance and good risk management while applying their local business acumen,” she said.
DTB Burundi commenced operations in 2009 with a single branch in the capital, Bujumbura. Over the past 15 years, it expanded its network to four branches and built a reputation for offering tailored banking solutions for retail, business, and corporate customers.
Its growth mirrored the gradual development of Burundi’s financial sector. The decision by Diamond Trust Bank Kenya to divest its stake is not seen as a reflection of the subsidiary’s performance but rather a strategic portfolio management decision by the parent company.
Completion of the proposed DTB Kenya sells Burundi subsidiary deal is not immediate. It is contingent on receiving all necessary regulatory approvals from the central banks of both Kenya and Burundi. Notifications must also be made to the Capital Markets Authority in Kenya and potentially other relevant regulators.
“Pending completion of the proposed transaction, shareholders and the investing public are advised to exercise caution when dealing in DTB Kenya’s securities on the Nairobi Securities Exchange,” the bank’s cautionary notice advised.
The bank has committed to keeping the market informed of any material developments regarding the transaction as they occur. This process ensures transparency for its shareholders and complies with the listing requirements of the exchange.
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