Co-operative Bank is mulling expanding into Rwanda as early as this year, says a banking report by Renaissance Capital.

Renaissance’s report, which was released last week and is based on feedback from the bank’s management, says that entry into Rwanda is one of Co-operative Bank’s growth prospects for 2016.

“[The bank] could consider an entry to Rwanda in 2016...has sufficient internal capital to fund this,” said the Renaissance report.

The listed bank on its part was non-committal on the exact period when it plans to set up shop in Rwanda and said that the country is amongst other markets in the region where Co-operative plans to be in by 2021.

The bank said entry into new markets would be through partnerships similar to the case of the subsidiary in South Sudan where the Kenyan lender holds a 51 per cent stake while the government holds the rest.

“The bank’s regional expansion strategy will involve similar joint venture models in other countries notably Rwanda, Uganda, Tanzania and Ethiopia in the next five years,” said Co-operative Bank in a statement.

Should the plans to expand to Rwanda pan out Co-operative Bank will join its peers Equity, KCB, CfC and I&M as other listed banks that operate there.

Renaissance’s report, however, said that it expected Co-operative Bank, like other lenders, to report reduced income from its South Sudan subsidiary due to the devaluation of the South Sudanese pound (SSP) in December last year.

“Prior to the devaluation, in 2015 the average exchange rate was shilling 33/SSP; it is now Sh5.5/SSP — an 83 per cent devaluation. This implies that every SSP1,000 of earnings made by the Kenyan banks in South Sudan will now equate to Sh5,500, vs Sh33,000 previously.”

KCB, the region’s largest bank, said that its Sh6.1 billion currency losses were mainly the result of the devaluation of the South Sudanese pound.

CfC, which released its results on Thursday, also said that the devaluation of the SSP had reduced revenues.

However, some analysts have speculated that South Sudan could later prove to be a major contributor to earnings despite the macroeconomic risks.

“South Sudan may yet prove to be the largest contributor to earnings despite substantial macro risks in the economy,” said South African-based BPI Capital in its latest report on Kenyan banks.