Equity Bank Group The Kenyan lender wants to expand and strengthen its presence in Democratic Republic of Congo by acquiring a stake in Commercial Bank of Congo (BCDC).
Equity Bank CEO, Dr. James Mwangi says the move will help the bank further penetrate the African market.
BCDC, with 29 branches in DRC, had net assets of Sh7.5 billion ($75 million) at the end of 2017, as quoted in its annual report. This has been growing at an average of 10% annually.
Kenya’s Equity Group is tipped to spend as much as $170 million (Sh17.6 billion) or more in order to actualize its plan to acquire DRC Congo’s second largest lender Banque Commerciale du Congo (BCDC).
The Kenyan lender wants to expand and strengthen its presence in Democratic Republic of Congo by acquiring a stake in Commercial Bank of Congo (BCDC). Equity Bank CEO, Dr. James Mwangi says the move will help the bank further penetrate the African market.
“By acquiring BCDC, Equity will be able to expand its footprint in Africa. Through the proposed transaction, EGH aims to provide access to competitive, tailored financial services to improve people’s lives and livelihoods whilst also delivering significant value to its stakeholders,” the Equity CEO said in a statement Monday. Also read: Kenya’s Equity Bank is banking on a Swedish national, John Wilson, to steer its Pan African dream of operating in 15 African countries by 2024
The BCDC’s acquisition estimate by Standard Investment Bank (SIB) is based on BCDC’s book value at the end of 2018. The estimate is also based on the price Equity paid to settle the 2015 deal when acquiring ProCredit Bank, another DRC bank.
According to SIB senior associate research analyst Martin Kirimi, given that BCDC is much stronger than ProCredit at the time of its acquisition, the least amount of money Equity will part with is likely to be twice the net assets of the lender.
“ We basically estimated the net assets as at 2018 and then used the two-times multiple (2x) that they bought ProCredit at. Mostly likely, BCDC will be higher than the 2x multiple and that is why we are projecting a minimum of $170m,” said Mr Kirimi. Why Equity is really salivating over BCDC
BCDC, with 29 branches in DRC, had net assets of Sh7.5 billion ($75 million) at the end of 2017, as quoted in its annual report. This has […]
