Equity Group Holdings Ltd is set to become the Democratic Republic of Congo’s biggest foreign bank after completing its acquisition of BCDC — the country’s second-largest lender.
Equity Bank, which is listed on the Nairobi Securities Exchange (NSE) and cross-listed on the Uganda and Rwanda stockmarkets, already has a foothold in the DRC through Equity Bank Congo, re-named after the acquisition of 86 percent shareholding of ProCredit Bank between 2015 and 2017.
The combined BCDC and Equity Bank Congo balance sheets will give the lender a total assets base of $2 billion, only second to Rawbank, which had an asset base of $2.1 billion as at December last year.
ProCredit had German roots, while Banque Commerciale Du Congo (BCDC) was majority-owned by a Belgian family.
"We have been very lucky to have acquired two strong European banks in DRC — ProCredit and BCDC. These banks were developed using European standards and supervised by European regulators. BCDC is listed in Belgium. We have denied competition any easy entry into that market, so competition will be very low for us because we shall be competing against indigenous family banks," said Equity Group CEO James Mwangi in an interview.
Equity Bank, which is Kenya’s second-largest lender by profitability, last week completed the acquisition of a 66.53 per cent stake in BCDC, at a cost of $95 million.
BCDC was majority-owned by Belgian entrepreneur, George Arthur Forrest and family (66.53 per cent) and the government of the Democratic Republic of Congo (25.53 per cent), while the remaining 7.94 per cent shares are owned by other minority shareholders.
Equity Group last year increased its shareholding in Equity Bank Congo to 93.6 per cent by acquiring an additional 7.6 per cent of shares held by the German State-owned development bank, KfW.
The remaining 6.4 per cent shareholding in EBC S is held by the World Bank’s private sector lending arm, the International Finance Corporation (IFC).
"Certainly by next year we believe the amalgamated Equity in DRC should be the biggest bank in DRC and that gives it two things: Big economies of scale and big capability to address the financial needs of the market and hence will be attractive to the mining industry. Essentially you notice that the merged group will be close to 40 per cent of the size of Equity Bank Kenya. If we experience the same growth what it means is that in five years I would expect the DRC subsidiary […]
