Site icon MONEYINAFRICA

Equity beats KCB in subsidiaries’ earnings

Equity beats KCB in subsidiaries’ earnings

Equity Group #ticker:EQTY businesses outside Kenya have widened the profit gap against top rival KCB Group #ticker:KCB, underlining the impact of acquiring a second bank in DRC Congo last year.

The lender’s pretax profit from its five subsidiaries in South Sudan, Tanzania, Rwanda, Uganda and DRC Congo rose 145 percent to Sh4.9 billion in half year ended June, compared to Sh2 billion booked in a similar period last year.

Equity’s growth in profits—helped by last year’s Sh10.35 billion ($95 million) acquisition of Banque Commerciale Du Congo (BCDC) — has helped it widen gap with KCB.

KCB Group pretax profit from its five subsidiaries in South Sudan, Tanzania, Rwanda, Burundi and Uganda was Sh2.013 billion in six months ended June, up 54 percent from Sh1.31 billion in the previous similar half-year.

The results mean that Equity made Sh2.89 billion more from regional businesses compared to KCB. This is in contrast to the Sh0.69 billion lead that Equity was commanding at half year 2020. Equity Group beat KCB last year to become the most profitable lender and has maintained this in the half year ended June 2021.

The lender booked Sh17.9 billion net profit in six months to June, being nearly double from Sh9 billion posted in previous similar period.

KCB Group doubled its net profit to Sh15.3 billion as its subsidiary National Bank of Kenya returned to profitability.

“If there’s one country that this group most likely will be defined by, it is the DRC. Those who call DRC the jewel on the crown, I agree with them,” said Equity Group CEO James Mwangi.

Equity Group entered DRC Congo in September 2015 through acquisition of 79 percent stake in ProCredit Bank. The lender last year followed up with acquiring 66.53 percent stake in BCDC.

The DRC entry has handed it advantage in regional business compared to its rivals such as KCB, Stanbic and I&M.

However, KCB last month completed acquisition of Rwandese lender Banque Populaire du Rwanda (BPR) and is in final stages of acquiring Banking Corporation Tanzania (BancABC) in deals that look set to cut Equity dominance.KCB is also eying a stake in DRC. The lender is now in talks with two lenders in the Central Africa country and targets to enter next year.DRC Congo has a population of 93 million—nearly twice that of Kenya—, with 45 percent of the population in urban centres presenting consumption opportunities.

Stay in the Know!

Sign up for the latest news and information on African Companies and Economy.

By signing up, you agree to receive MoneyInAfrica offers, promotions and other commercial messages. You may unsubscribe at any time.
Exit mobile version