Equity Bank under Equity Group Foundation has made an extra mile by acquiring 6.6 percent stake in its supplementary banks in the DR Congo worth Sh9.24 billion, painting a clear picture of the fast growing lender to create more profit away from the Kenyan Equity
In its annual report last week the bank disclosed that it acquired a 2.3 percent stake from minority owners of Equity BCDC in August last year for Sh740 million.
The lender also confirmed to have bought an additional 452,659 shares in the DR Congo unit for Sh8.5 billion through a rights issue, giving the bank a 4.3 percent stake.
Democratic Republic of Congo being one of the largest countries on the continent by land mass, attracts more investors including Equity bank by the country having its largest population of more than 90 million people.
Not only Equity Bank but other Kenyan commercial banks which include KCB Group, among others are looking beyond their borders for acquisitions with an intention to seeking to tap on available opportunities across the larger East Africa region, driven by rapid economic growth and trade integration.
Equity Bank also runs its subsidiary banks in East African countries which include Tanzania, Rwanda, Burundi, South Sudan and Uganda and has a representative office in Ethiopia with the aim of diversifying into a regional bank.
“The new shares acquired through a rights issue, in addition to shares acquired from minority, resulted in an increase in Equity Group Holdings shareholding in Equity BCDC to 84.1 percent from 77.5 percent,” says Equity.
This transaction values the DR Congo unit at Sh140 billion, making it the most valuable Equity subsidiary.
Equity Group’s banking business in Kenya, where it is the biggest bank by customers, provides the bulk of profits but subsidiaries outside the country are growing in importance.
End of March 2023 Equity Bank Group released its annual profit where it posted a net profit of Ksh.46.1 billion for the full year which ended December 2022.
During the bank’s investor briefing it announced a dividend payout of Ksh.4 per share.
Equity Group’s net profit represented a 15% increase when compared to Ksh.40.1 billion posted in 2021.
Pre-tax profit for the year reached Ksh.59.8 billion from Ksh.51.9 billion posted a year earlier.
The performance was largely driven by a 27% growth in interest income of Ksh.119.6 billion.