The Group is the only new entrant among the top ten leading banking brands and has entered the arena with an impressive Brand Strength Index (BSI) of 90.8 compared to the strongest banking brand that scored a BSI index of 94.

It tied with the top four banking brands with a similar brand ranking score of AAA+, the highest rating that a brand can attain. Brand Strength Index (BSI) is calculated by assessing a brand’s marketing investment, Stakeholder Equity and Business Performance. Based on the BSI, a brand is assigned a corresponding Brand Rating of up to AAA+, similar to a credit rating.

According to the Brand Finance Banking 500 2022 Annual Report that was released this week, Equity Group is among the few banks from smaller and emerging markets to join a total of 30 new entrants into the top 500 banking brands.

While Equity was ranked position 338 overall among the top 500 banking brands, the report shows that it is not only a new entrant but also the leading bank in Sub-Saharan Africa outside of South Africa, in the league.

The report quotes David Haigh, the Chairman and CEO of Brand Finance, “As banks continue to battle the fallout from the COVID-19 pandemic, the importance of a solid brand is more significant than ever.

Banking products are becoming commoditised, and banks will need to continue differentiating themselves from other competitors in the market through the use of their brand, particularly in the face of an emerging threat from challenger brands and decentralised finance in the future.”

Speaking about the achievement, Dr. James Mwangi, Equity Group Managing Director and CEO said, “The ranking of Equity as the 5^th strongest banking brand in the world is a strong validation of our twin-engine business model that has positioned Equity as a social banking brand, driven by our vision of championing the social-economic prosperity of the people of Africa.”

Dr Mwangi noted that against a background of the COVID-19 pandemic and its consequent disruption of global economic activities with the resultant social impacts, Equity Group Holdings had demonstrated resilience in the execution of an offensive and defensive strategy, a versatile business model, leadership agility, and innovation and diversification all aimed at supporting customers and the community to survive, recover and thrive post the pandemic.

“It is a moment to celebrate Africa’s rise and showcase Africa’s capacity to develop its own local and regional manufacturing and supply chains to replace the broken global supply chains as a result of the COVID-19. The commitment to the digitisation of our services continues to drive the Group’s growth in both customer satisfaction and as the leader in Kenya’s global financial sector. The Bank’s investment in digital banking has resulted in the digital bank handling 97% of all transactions with mobile channels processing 90% of digital transactions. This approach has given our customers the freedom, choice and control to access banking services anytime anywhere and has taken convenience and customer experience to a different level,” said Dr Mwangi.

He further added, “As a result, we have seen mobile, internet and e-commerce becoming the preferred channels of choice for payment processing and lifestyle fulfilment with 74% of customers opting for cashless transactions.”

Dr Mwangi further noted that “We have proven that a shared value business model is both purposeful and profitable. Doing well can go hand in hand with doing good. Our corporate social arm, the Equity Group Foundation has scaled its operations to reach a spend of USD $513 million in social investment programs, reaching 37,000 secondary school Wings to Fly scholarships; 17,000 University scholarships under the Equity Leadership Program; 3,000 TVET scholarships and nearly 700 Global university scholarships; while 54 Equity Afia clinics are now operational with 572,707 unique patients visits. To support global initiatives which combat climate change, Equity has planted 7.1 million trees and financed and distributed 303,000 clean energy products.”

Equity Group was the most valuable bank in the Nairobi Securities Exchange with a market capitalisation of Kshs 199.9Billion as of 31^st December incorporating a brand premium driven by superior customer experience, innovation and a technology-enabled business model which drove earnings and potential long-term benefits.

The Group is currently rolling out an audacious post-COVID-19 Recovery and Resilience Program across East and Central Africa which entails supporting 5 million SMEs with loans of up to Kshs.500 billion to accelerate growth in a post-pandemic economy. of the program aims to create 25 million direct jobs and another 25 million indirect jobs.

The initiative is in partnership with governments of the 6 countries of its operations and will centre on the promotion of cross border trade under the East African Community and African Continental Free Trade Area protocols.

The program has won the support of the United Nations (UN) under the Sustainable Development Goals initiative, of a variety of Development Finance Institutions (DFIs), the Mastercard Foundation under our Young Africa Works partnership and with other Private Sector business actors. The Group partnered with governments of Kenya and DRC to organize a 15-day Kenya-DRC Trade mission in November-December last year coming on the back of hosting a South African Business Trade Mission and has invested Kshs 300 million to facilitate the various trade missions.

Every year, leading brand valuation consultancy Brand Finance puts 5,000 of the biggest brands to the test, and publishes nearly 100 reports, ranking brands across all sectors and countries. The world’s top 500 most valuable and strongest banking brands are included in the annual Brand Finance Banking 500 ranking.

Across the banking sector, the key drivers of a strong brand are strong stakeholder perceptions of its range of products and services, the quality of its digital platforms, strong customer service and overall accessibility to customers.

Brand Finance is the world’s leading independent brand valuation and strategy consultancy with its headquartered in London and has a presence in more than 20 countries.

Equity Group ranked in the position of 39 globally on return on assets, position 71 on return on capital, and position 149 on soundness (Capital Assets to Assets ratio), in the Top 1,000 World Banks 2021 report by The Banker magazine, further consolidating its position among global banking giants.

Kenya continues to boost its international financial centre pedigree with two banking brands in the top 500 Global Banking Brands while Egypt and Morocco have three each, Nigeria has five and South Africa has seven.

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Coming hot on the heels of its acquisition of a majority stake in Banque Commerciale Du Congo (BCDC), which has since been renamed EquityBCDC, Equity Bank is now eyeing new opportunities in Ethiopia.

On the other hand, Kenya Commercial Bank (KCB) has its eyes trained on Rwanda and Tanzania. The lender is at an advanced stage of acquiring stakes in Banque Populaire du Rwanda (BPR) and Tanzania’s BancABC.

The appetite for regional expansion is fueled by ongoing reforms in the region. With the liberalization of the telecommunications sector in Ethiopia, Kenyan banks such as KCB and Equity which have representatives in the country are now waiting on the wings and hoping on leveraging on resultant technology to extend their influence in that market.

Commenting on this during the release of Q1 financial results, Equity Bank CEO James Mwangi said, “We have ears on the ground. And I think what the ground is saying, is that it is just a matter of time before the financial sector is liberalised.”

“Evolving economic, social, political governance reforms and environment have strengthened prospects for long-term sustained regional growth and investment, This coupled with the development of physical and soft infrastructure enhance opportunities for private sector credit growth and productivity gains from cross border trade,” he added.

The improving business environment between Kenya and Tanzania after years of frosty relationship is also driving the appetite for investors in that market.

Players in the financial sector are hoping to gain from the tripartite East African Crude Oil Pipeline project agreement (EACOP) signed between Tanzania, Uganda, and a number of oil companies.

With a population of about 90 million, almost half of whom are young people living in urban centers, the DRC is another lucrative destination for Kenyan lenders. The prospects are even higher with the US expected to reinstate DRC’s eligibility for trade preferences under the African Growth and Opportunity Act (AGOA).

In the first quarter of 2021, Equity Bank’s regional subsidiaries registered resilience and robust growth to contribute 40 per cent of total deposits while KCB Group recorded a net profit of 6.37 billion. this marked a 1.7 per cent increase from 6.26 billion shillings reported same period last year.

According to the 2020 Bank Supervision Annual Report by the Central Bank, cross border banking by some Kenyan banks has expanded in the EAC partner states and the DRC. The banks include KCB, Diamond Trust Bank and NCBA.

Others are Guaranty Trust Bank Kenya, Equity Bank, I&M, ABC Bank and Cooperative Bank. These banks have positioned themselves to capitalize on the growing cross border trade flows.

Despite the challenges of the Covid-19 pandemic that slowed down economic activities globally, Kenyan banks continued to grow their regional footprints. As of December 31, 2020, the total number of branches of Kenyan banks subsidiaries in the EAC Partner States and DRC grew by 8.5 percent from 316 branches recorded the previous year to 343 recorded as at December 31, 2020.

The growth was mainly driven by Equity Group Holding Plc’s acquisition of BCDC. However, two other banks, KCB and Guarantee Trust Bank , scaled down their branch network in the region.

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Effectively, NBK shareholders who swapped their shares for those of KCB will now be able to freely trade the new stocks at the bourse.

KCB got consent to acquire NBK from shareholders holding 297,130,033 issued ordinary shares out of 338,781,200 issued ordinary shares, representing 87.7% by the offer closure date on August 30, 2019. This brings to the total 3,209,043,204 the number of shares the biggest bank by asset base in Eastern Africa has floated at the NSE.

“The listing will enhance the vibrancy of the capital market and will be instrumental in fueling continued business growth and the execution of the
Bank’s expansion plans. It provides more shares and therefore liquidity on
the counter, allowing more investors to be part of the Bank,” said KCB
Group Chairman Andrew Wambari Kairu.

The takeover is expected to give NBK a new lifeline as a business and fits well within the KCB expansion strategy.

“We see this friendly takeover as an enrichment of the banking heritage that we have created in the country in our more than 120 years of existence. It is anticipated to deliver immense value to our shareholders,
customers, staff and all other stakeholders through the creation of meaningful synergies from the business lines and group operating structure,” he said during the bell ringing ceremony to commence the listing of the new shares at the NSE trading floor on Friday.

In his remarks, NSE Chairman Mr. Samuel Kimani said: “We are delighted
that the acquisition has been successfully concluded, creating additional
value to the KCB shareholders and boosting overall market participation.
We continue to encourage domestic led economic growth and applaud
KCB on this historic transaction.”

KCB has started the process of integrating NBK into KCB, an exercise that
is expected to be completed within the next 24 months, focusing on
systems, processes, people and institutional governance.

It is anticipated that as a combined institution, this gives KCB a stronger
edge to play a bigger role in driving the financial inclusion and economic
empowerment agenda in the East African region while simultaneously
building a robust and financially sustainable organization.

The conversion of the non-cumulative preference shares in the share
capital of NBK is in progress and the swap of the said shares will occur. On
completion of these processes, KCB will hold 1,432,130,033 ordinary
shares comprising 97.17% of the total issued share capital of NBK and
shall apply the provisions of the Capital Markets (Take-overs and Mergers)
Regulations, 2002 and Part XXIV, Division 4 of the Companies Act to
compulsorily acquire the remaining 41,651,167 issued ordinary shares of
NBK. Requisite notices in this regard will be sent to all concerned
shareholders.

The bell-ringing event was witnessed by KCB Group CEO and MD Joshua
Oigara, NSE CEO Geoffrey Odundo, Capital Markets Authority CEO Paul
Muthaura, Central Depository & Settlement Corporation Limited Acting.
CEO Hilda Njeru, and Competition Authority of Kenya CEO Francis
Wang’ombe.

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Going forward, Equity will present itself as a unified brand, with one basket of products and services under one roof; ranging from banking to insurance and investment. From an identity perspective, the new logo now features “Equity” without an entity name such as Group, Bank, Insurance, or Investment Bank.

Commenting on the move, Equity Group CEO and Managing Director Dr. James Mwangi noted that the refreshed positioning follows an extensive three-year process of sounding out its current and future customer segments.

“The evolution of our brand is an important part of our strategy for continued market leadership as well as being integral to the promise we made to all of our stakeholders when we began our journey of transformation to modernize and do all we can to get closer to and better serve our customers,” he said.

“We are proud of the role Equity has continued to play in the growth and prosperity of Kenya and its people. Our brand has carried us through a disruptive and trailblazing 35 years’ period. During this period, we have evolved from a small building society to a leading bank in East and Central Africa. We have become a leading digital bank while our social impact investments hold promise to secure our young people as our future servant leaders. The refreshed brand identity reflects the future we envision, one which communicates our global capability, strong heritage, innovative culture and agile business model that will carry and give the brand momentum to scale its strengths across Africa and the world,” Dr. James
Mwangi added.

The refreshed look will first roll out in Kenya and eventually in all other markets where the Group has established its presence including Uganda, Tanzania, South Sudan, Rwanda, Democratic Republic of Congo (DRC) and now, Zambia, Mozambique and Ethiopia.

Equity maintains that the fresh identity matches the new realities, business model, customer segments and preferences and the evolving digital space; enabling it to focus on key areas that will see it remain relevant to the diverse and current consumer needs. This, it adds, will be achieved through spurring economic growth by empowering consumers; businesses and enterprises through innovative solutions, infusing digital capabilities at all touchpoints while nurturing existing and building new relationships.

In a bid to unlock new opportunities within the growing digital banking space, Equity will continually focus on operational efficiencies, driven through innovations and re-engineering of its value chain. Customers will be further enabled to interact with the bank on self-service channels of mobile and internet devices or on the 3rd party low variable cost infrastructure of over 46,000 agents and over 27,000 merchants.

“In developing this identity, we emphasize that our customers come first and that our primary focus is to ensure we are prepared and well positioned to meet all the needs of our stakeholders in the most effective and seamless manner,” said Dr. Mwangi.

“From tomorrow you will see the new signage in all our branches, as part of our refurbishment plan to modernize and update its distribution network which includes branches, ATMs online platforms and third-party outlets such as Agent and merchant locations,” noted
Dr. Mwangi.

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