Equity to expand in DRC with acquisition of second-largest bank

Equity Group Holdings #ticker:EQTY is set to acquire a controlling equity stake in Commercial Bank of Congo (BCDC) with the aim of merging the business with its existing subsidiary in DRC.

The proposed deal will give new impetus to Equity’s Pan-Africa expansion strategy coming just after similar transactions that would see the bank increase units in Zambia, Mozambique, Tanzania and Rwanda. 

“By acquiring BCDC, Equity will be able to expand its footprint in Africa. Further, through the proposed transaction, EGH aims to provide access to competitive, tailored financial services to improve people’s lives and livelihoods whilst also delivering significant value to its stakeholders,” Equity chief executive James Mwangi said in a statement Monday.

The Nairobi Securities Exchange-listed company first entered DRC by acquiring 79 percent stake in Pro Credit Bank in 2015. In 2017, the bank raised its stake by seven percent to 86 percent. 

ProCredit was the seventh largest bank by assets in the market with total assets exceeding $200 million (about Sh20 billion), net assets of $25 million (Sh2.4 billion) and a customer base of over 170,000 at the time of the acquisition.

The Kenyan multinational rebranded the subsidiary to Equity Bank Congo last year.

The Congo subsidiary is the most profitable in the region.  

Access to banking services in the resource-rich nation is low compared to other countries in Sub-Saharan region. About 90 per cent of the population is unbanked.

“The Proposed Transaction is an opportunity for EGH to deliver the vision of building sub-Saharan Africa’s premier financial institution through delivering innovative products and services to customers, including, in particular, the effective use of technology,” Mr Mwangi said.

BCDC is the second-largest bank in DRC with about 29 branches across the country including key cities Kinshasa, Goma and Lubumbashi. It has an asset base of about $700 million.