Kenya’s Equity Bank said it plans to acquire the second-largest lender in the Democratic Republic of Congo as part of the East African group’s strategy to expand across Africa, Reuters reported. According to a Financial Times report(paywalled), the bank’s parent company, Equity Group Holdings , has entered into a non-binding agreement to acquire a controlling stake in Banque Commerciale du Congo, the company said in an emailed statement on Monday. “The proposed transaction is an opportunity for EGH to deliver the vision of building sub-Saharan Africa’s premier financial institution through delivering innovative products and services to customers, including, in particular, the effective use of technology,” the company said. Founded as a provider of mortgage financing in the 1980s, Equity bank has expanded rapidly in the last 15 years by targeting previously unbanked, low-income depositors and is now Kenya’s biggest lender by market value and Africa’s largest bank by customer numbers.
Equity acquired Congo’s seventh-biggest bank, ProCredit Bank Congo, in 2015 and in April agreed to buy Atlas Mara’s banking operations in Rwanda, Zambia, Mozambique, and Tanzania, in a deal worth about $106m.
Equity now has operations in eight African countries. It did not disclose how much it will pay for the stake in BCDC, which was founded in 1909. BCDC had total assets of $706m at the end of 2017. The Congolese government owns a 25 percent stake in the lender.
Although the value of the transaction has not been revealed, Equity Group announced that the deal will involve the exchange of cash for the controlling stake in Commercial Bank of Congo, African Markets reported.
The transaction is subject to shareholders and regulatory approval. All the due processes will be followed before the acquisition is finalized. Support RegionWeek by making a contribution, for whatever amount you choose, ($1, $3, etc.) it only takes a minute. → CLICK HERE.