for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up
Money News

Kenya's Equity Group eyes regional footprint after buying Congo lender

NAIROBI (Reuters) - Kenya’s Equity Group’s acquisition of Congo’s Banqué Commerciale du Congo will help it grow its balance sheet to 1 trillion shillings ($9 billion) by the end of 2020 and diversify into a regional bank, chief executive James Mwangi said.

The deal between Equity’s operation in the Democratic Republic of Congo and BCDC was completed in August and has accelerated the bank’s goal of having 40% of its balance sheet outside of Kenya, Mwangi said.

“This year, 40% of our assets will be outside, reducing the sovereign risk and truly becoming a regional bank,” he told Reuters on Wednesday.

“BCDC and Equity combined together would be a $2.5 billion balance sheet by the end of this year, and that is how we see a line of sight to a trillion shilling balance sheet by the end of this year.”

Equity also operates in Tanzania, Rwanda, Burundi, South Sudan and Uganda, and has a representative office in Ethiopia.

Like other commercial banks in Kenya, Equity’s profits have taken a hit due to effects of COVID-19, leading to a 20% drop in pretax profit to 19.8 billion shillings ($181.57 million) in the first nine months of 2020, it said on Thursday.

The bank’s loan loss provisions grew 11-fold to 14.3 billion shillings in the same period. The bank obtained a $600 million credit line to ensure that the cash flow that could have come from rescheduled loans was maintained, Mwangi said, without giving details of the credit line’s source.

COVID-19 containment measures have hurt businesses and affected about 45% of the bank’s customers, he said.

“We gave ... the customers rescheduled facilities to ensure that none of them failed because of loan repayment,” he said.

The bank reported a 30% growth in its loan book to 453.9 billion shillings at the end of September 2020 from 348.9 billion shillings at the same time last year, helped by demand for credit for online businesses, manufacturers of personal protective equipment, logistics firms and agro-processors, Mwangi said.

($1 = 109.0500 Kenyan shillings)

Reporting by Omar Mohammed; Editing by George Obulutsa

for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up