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Equity Group, a leading financial services group led by Kenyan tycoon James Mwangi, has acquired an additional 6.6 percent stake in its subsidiary, Equity Bank CDC, for Ksh9.24 billion ($86 million), highlighting the company’s bullish outlook on the DRC market and its strategic intent to diversify its earnings and revenue.
The Mwangi-led group acquired a 2.3-percent stake from minority owners of Equity BCDC in August 2022 for Ksh740 million ($6.9 million), and also bought an additional 4.3-percent stake worth Ksh8.5 billion ($79.4 million) through a rights issue, increasing the total acquisition during the year to over 6.6 percent.
This strategic acquisition increased the bank’s stake in the Congo unit to 84.1 percent, from 77.5 percent at the end of 2021.
Mwangi, Equity Group’s CEO, who owns a significant stake in the group has played a pivotal role in the lender’s expansion beyond Kenya into Uganda, Tanzania, South Sudan, Rwanda, and the Democratic Republic of the Congo.
The acquisition perfectly positions Equity Group to dominate the rapidly growing East and Central African banking sector. The company’s bullish outlook on the Congolese market is justified by its recent performance.
This strategic acquisition is part of Equity Group’s plans to solidify its position as a leading player in the region’s banking sector.
The company’s diversification strategy has been successful in driving growth and profitability, and the acquisition is expected to deliver significant long-term value to its shareholders.
At the end of its 2022 fiscal year, Equity Group reported an all-time high profit of Ksh46.1 billion ($350 million), cementing the group’s position as the most profitable lender in East Africa.
According to its 2022 financial report, Equity Group’s profit rose by 15 percent from Ksh40.07 billion ($304.2 million) to Ksh46.1 billion ($350 million) due to growth in its interest and non-interest incomes.
