Equity Group acquired an extra 6.6 percent stake in its subsidiary in the Democratic Republic of the Congo for Sh9.24 billion, underlining the lender’s quest to increase the share of profits outside Kenya.
Equity also 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.
The Kenyan bank disclosed in its annual report last week that it acquired a 2.3 percent stake from minority owners of Equity BCDC in August last year for Sh740 million.
DR Congo is one of the biggest countries on the continent by land mass and has more than 90 million people, making it appealing to ambitious banks in the neighbouring states looking for growth.
Kenyan commercial banks, including KCB Group, are looking beyond their borders for acquisitions, seeking to tap growing opportunities in the wider East Africa region, driven by rapid economic growth and trade integration.
Equity also operates in Tanzania, Rwanda, Burundi, South Sudan and Uganda, has a representative office in Ethiopia and is diversifying into a regional bank.
This transaction values the DRC 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.
The share of profits from the subsidiaries grew from 15 percent in 2018 to 27.6 percent at the end of last year.
