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Kenya's Equity bank to expand to Congo via acquisition

26 May 2015, 21:40

Nairobi - Kenya's Equity Bank Group plans to expand its operations into the Democratic Republic of Congo by acquiring a 79 percent stake in ProCredit Bank Congo, its chief executive officer said on Tuesday.

James Mwangi, the CEO of Equity Bank, which focuses on the lower-income part of the market and also operates in Uganda, South Sudan, Tanzania and Rwanda, told a news conference the move was subject to regulatory approval but did not give a time frame for its entry, nor the cost of the investment.

"Today we announce the objective of making our first step outside east Africa," Mwangi said.

"In terms of entry, we have decided this country is too big to do a greenfield. We have decided to acquire a bank," said Mwangi, whose term at the helm of Kenya's largest by number of customers was extended in April by 10 years.

The rest of the stake in ProCredit - the top bank in Congo for small and medium business - will be owned by Germany's state controlled development bank KfW, with 12 percent, and the International Finance Corporation (IFC), the World Bank's private sector investment arm with 9 percent.

Also read: Uhuru wants SGR extended to Naivasha

Mwangi did not give the price of the acquisition but said Equity had allocated $60 million for expanding ProCredit Congo's branch network and strengthening the bank.

Earlier this month, Mwangi said Equity planned to expand to Congo, Burundi, Zambia, Zimbabwe, Malawi, Mozambique, Botswana, Ghana and Nigeria, as well as Ethiopia, which is currently off limits to any foreign bank.

ProCredit has total assets of more than $200 million and a customer base of 170,000. It is the seventh-largest bank by assets in Congo.

"We are selling because the group has decided to focus on eastern Europe," Helen Alexander, manager of parent company ProCredit Holding, told the news conference.

Equity Bank reported a 13 percent rise in first quarter pretax profit to 6.11 billion shillings.

The bank has said it is testing a mobile phone-based banking service, Equitel, which it aims to launch in July and break even by September. It would aim to rival a service named M-Pesa ran by telecommunications market leader Safaricom.


- Reuters


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