South Sudan’s largest foreign bank Kenyas KCB has shut her branches in the country as hyperinflation amidst civil war bites hard into the group’s profits according to KCB managing directors.
KCB, East Africa’s biggest bank by assets, will temporarily close five branches, leaving only 10 operational according to Harun Kibogong the groups managing director.
KCB is one of the first foreign banks to move into South Sudan more than a decade ago, lured by one of sub-Saharan Africa’s lowest banking penetration rates and its petrol-dollars.
But a three-year civil war has curbed oil production, sent the economy into a tail-spin and spurred runaway inflation.
“We are not saying KCB is pulling out from South Sudan,” Kibogong said in an interview this week. “What we are doing now downsizing for survival.”
KCB lost 2.8 billion South Sudanese pounds in 2016, he said. He declined to specify the amount in dollars. The South Sudanese pound traded at 16 to the dollar on the black market on Friday, compared with 13 in February.
The bank has operated in South Sudan since 2006. Its branches are older than the country itself, which only became independent from Sudan in 2011.