Dr James Mwangi, Equity Group Chief Executive Officer. PHOTO | FILE | NMG Equity Bank’s plan to acquire 100 per cent shareholding in BancABC of Zambia, Mozambique and Tanzania including 62 per cent of the shares of Banque Populaire du Rwanda Ltd fell through last week after 16 months of negotiations with Atlas Mara Ltd (ATMA).
If successful, the transaction could have lifted Equity Bank’s presence in nine African countries.
Equity Group Holdings (EGH) has halted its cross-border expansion bid after the failed acquisition of four banks in Rwanda, Zambia, Tanzania and Mozambique last week.
Chief executive James Mwangi told The EastAfrican the lender which is listed on the Nairobi Securities Exchange (NSE) will now focus on “vertical” growth by consolidating and strengthening its business operations in the existing six markets, with the aim of transforming into a Ksh1 trillion ($10 billion) bank with 100 million customers.
“Our expansion is in two ways; horizontal and vertical. We have opted for vertical expansion where you deepen and then scale up your market share in the countries you are operating in,” said Mwangi.
“So, meanwhile what will we do because we already have six banks? We will focus on those banks, deepen them and make them stronger. We are also targeting to increase the market share in the countries we are in. The DRC that transaction is complete and we will be doubling our market share and then using the new capability to really try to grow significantly.”
PRUDENCE AND CAUTION
Equity Bank’s plan to acquire 100 per cent shareholding in BancABC of Zambia, Mozambique and Tanzania including 62 per cent of the shares of Banque Populaire du Rwanda Ltd fell through last week after 16 months of negotiations with Atlas Mara Ltd (ATMA). If successful, the transaction could have lifted Equity Bank’s presence in nine African countries.
“ATMA is an event that has made it prudent for us to be cautious. You already don’t understand the risk of Covid-19 and nobody understands. So Covid-19 situation has made us to sit back. We also don’t want to be telling shareholders that we are being cautious that is why we are withholding dividends for them and on the other side you are demonstrating offensive expansionist psychology of buying the banks,” said Mwangi
According to Dr Mwangi, growing the existing businesses will require minimum resources, free of uncertainty compared to cross border expansion (horizontal growth) under the current operating environment […]
