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DRC now holds Equity’s most profitable regional business

DRC now holds Equity’s most profitable regional business

FILE | Equity Group CEO Dr. James Mwangi The Democratic Republic of Congo (DRC) now holds the most profitable regional business for the Equity Group.

Data from the lender shows the Equity BCDC subsidiary in the DRC overtook Equity Bank Uganda Limited (EBUL) as the most profitable regional unit for the Group in six months closing June 30.

With a profit after tax (PAT) of Ksh.1.6 billion, Equity BCDC further holds 42 per cent of all profits from its five regional subsidiaries.

This means that for every Ksh.100 in earning by the Group outside Kenya, Ksh.42 streams from the DRC.

During the six-month period, profitability for the unit soared by a remarkable 447 per cent.

Nevertheless, growth for Equity Group in the DRC has come largely for acquisitions instead of organic growth.

In August 2020 for instance, Equity Group completed the purchase of an initial 66.53 stake in the Commercial Bank of Congo (Banque Commerciale du Congo) for Ksh.10.3 billion before merging it to its existing DRC unit.

However, Equity Group Managing Director James Mwangi still sees growth for the subsidiary even in the post-acquisition era buoyed largely by stable macro-economic environment in the country.

“DRC seems to be surprising us everyday- the resolve by the leadership on getting the country back on track quickly catch up with the rest seems to be sustained,” he told investors on Tuesday.

“We can see an economy where the steep increase in commodity prices is likely to help the country deal with its macroeconomic situation very easily to cover its fiscal deficits and almost have a new beginning. If there is a country to define us as a Group, it’s the DRC.”

Equity BCDC now has an asset base of Ksh.328.3 billion and has a 12.6 percent return on equity (ROE).The Kenyan market nevertheless remains Equity Group’s primary business by both profitability and assets base.Equity’s subsidiary in South Sudan is the least profitable at present have been the only unit to return a loss, at Ksh.500 million, at the half year stage.Video Of The Day: | CHASING HOPE | KEMRI undertaking stem cell research for treatment of Leishmaniasis

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