President Uhuru Kenyatta (second left) unveils a plaque at BCDC’s Equity Centre in DRC alongside (left to right) Equity Group CEO James Mwangi, Central Bank of Congo Governor Deogratias Mutombo, Equity BCDC Managing Director Celestin Mukeba, and non-executive chairmen Prof Isaac Macharia and Nestor Ankiba. FILE PHOTO | COURTESY The bank, which is listed on the Nairobi Securities Exchange, was targeting to hit a Ksh1 trillion ($9 billion) in asset base and 100 million customers by 2024 through a pan-African expansion programme.
In 2017, Equity shut down seven of its branches in South Sudan citing currency devaluation and persistent political instability.
Prior to its acquisition of the Congolese second largest bank by assets (BCDC) in a deal valued at $95 million last year, Equity Bank, had put an additional $42.81 million in Tanzania, Uganda and the DRC units.
East Africa’s largest lender by assets Equity Group Holdings (EGH) Ltd is fighting to keep its underperforming subsidiaries in Tanzania, South Sudan and Rwanda afloat through additional funding to strengthen its ‘vertical’ growth plan, mooted after abandoning further cross-border acquisitions last year.
The bank, which is listed on the Nairobi Securities Exchange, was targeting to hit a Ksh1 trillion ($9 billion) in asset base and 100 million customers by 2024 through a pan-African expansion programme that failed last year, after the Ksh1.18 trillion ($10.63 billion) lender failed to acquire four banks in Rwanda, Tanzania, Zambia and Mozambique, which it considered key to its ambitious plan.
Failure to proceed with the acquisition of more banks in the continent prompted the lender’s board to consider achieving the same feat through vertical (organic) growth that involves strengthening and consolidating its existing businesses in six markets including Kenya, Democratic Republic of Congo (DRC), Tanzania, Rwanda, Uganda and South Sudan.
However unaudited financial statements for the nine months to September 30 shows underperformance of Equity’s three subsidiaries (South Sudan, Tanzania and Rwanda), which contributed a paltry Ksh1.42 billion($12.79 million) to the Group’s overall net profit of Ksh26.9 billion ($242.34 million).
The South Sudan subsidiary contributed the least profit of Ksh20 million ($180,180.18) followed by Tanzania (Ksh200 million, $1.8 million) and Rwanda (Ksh1.2 billion, $10.81 million). Sovereign risk factor
On the other hand the best performing subsidiaries included Kenya (Ksh21 billion, $189.18 million), EquityBCDC (Ksh2.2 billion, $19.81 million) and Uganda (Ksh2.1 billion, $18.91 million).
The three subsidiaries are also struggling in deposit mobilisation with Equity bank South Sudan collecting the least of […]
