Equity Group has expanded its presence in the Democratic Republic of the Congo (DRC) by increasing its stake in its subsidiary Equity BCDC to 84.1 percent, up from 77.5 percent, through a Sh9.24 billion ($84 million) investment. The move underscores the Kenyan bank’s commitment to boosting profitability outside its home market.
In its annual report, Equity revealed that it purchased a 2.3 percent stake from minority shareholders for Sh740 million ($6.7 million) in August last year. It also acquired an additional 4.3 percent stake, amounting to 452,659 shares, for Sh8.5 billion ($77.3 million) through a rights issue.
With a landmass among the largest in Africa and a population exceeding 90 million, the DRC offers a promising market for ambitious banks seeking growth. In response to rapid economic expansion and trade integration, Kenyan banks such as KCB Group are pursuing acquisitions in the broader East African region.
Equity Group, which also operates in Tanzania, Rwanda, Burundi, South Sudan, and Uganda, has been diversifying into a regional bank. The bank’s subsidiaries outside Kenya have been steadily growing in importance, with their share of profits increasing from 15 percent in 2018 to 27.6 percent at the end of last year.
The DRC unit, valued at Sh140 billion ($1.3 billion), is now Equity’s most valuable subsidiary. The bank’s CEO, James Mwangi, has highlighted the potential for the DRC unit to surpass the Kenyan operations in profitability. The capital injection into Equity BCDC is expected to support development projects, as well as mining and manufacturing companies in the DRC.
Equity’s expansion in the DRC follows the nation’s entry into the East African Community in July last year, positioning the bank to benefit from increased business opportunities. The lender initially entered the country by acquiring an 86.6 percent stake in ProCredit, a German bank, between 2015 and 2017. In 2019, it increased its shareholding in EBC SA to 94.3 percent by purchasing an additional 7.7 percent stake from the German state-owned development bank KfW.