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Equity Bank has raised it’s ownership in Equity Bank Congo (EBC) to 94.3 percent. This comes after acquiring an additional 7.7 percent stake from German sovereign wealth fund KfW.
The deal worth KES 996 million is the latest investment in the subsidiary since its initial purchase of 66.53 percent stake in August 2020. This acquisition is part of the bank’s strategy to consolidate its banking subsidiaries in the Democratic Republic of Congo (DRC).
“On November 27, 2020, Equity bought shares previously held by KfW in Equity Bank Congo S.A. for a consideration of $9 million (KES 996 million),” Equity said in a statement.
In an earlier deal, Equity merged EBC with its second bank in DRC, Banque Commerciale Du Congo (BCDC), in which it had recently acquired a 66.53 percent stake at a cost of KES 10.2 billion ($95 million). The merged bank, the second-largest in DRC with an asset base of KES. 322 billion ($3 billion), was renamed EquityBCDC.
The new deal with KfW is expected to help Equity in enlarging its stake in the merged entity and underlines its confidence in DRC’s banking prospects.
Equity has now spent a cumulative KES 17 billion in DRC, making it the second most significant market after Kenya in which the lender has invested a total of KES 43 billion.
In its latest financial report for the year ending December 2020, the DRC banking operation was the second most profitable subsidiary as it reported pre-tax earnings of KES 1.6 billion. This amount represents 7.3 percent of the group’s total of KES 22.1 billion.
Equity has disclosed that it made the equivalent of KES 5.6 billion in the form of commissions on transactions including foreign exchange trades in the year ended December 2019. This accounted for 46.6 percent of the total income of KES 12 billion over the same period.
