Equity Group, led by Kenyan businessman James Mwangi, is set to inject Ksh800 million ($5.7 million) into its general insurance business through a loan.
The capital injection will serve as the initial funding capital for the proposed subsidiary and will cover its operating costs.
This comes just a month after Equity Group received preliminary approval from the Insurance Regulatory Authority (IRA) to establish a general insurance business.
To expedite the launch of the subsidiary, the financial services conglomerate plans to seek approval from shareholders next week to formally establish and operate the general insurance business in Kenya. The wholly-owned subsidiary, Equity Group Insurance Holdings, will oversee this venture.
The agenda for the Annual General Meeting includes a proposal to grant a $5.7 million loan to the general insurance subsidiary, with the funds allocated for share capital and initial operating expenses.
Equity Group‘s regional expansion strategy has proven successful, as evidenced by its presence in Uganda, Tanzania, South Sudan, Rwanda, and the Democratic Republic of the Congo. This extensive reach solidifies Equity Group’s position as the largest financial services group in East and Central Africa.
Under the leadership of James Mwangi, who holds a 3.38-percent stake in the company, Equity Group witnessed a 15 percent increase in profits in 2022, reaching Ksh46.1 billion ($350 million) from Ksh40.07 billion ($304.2 million).
This growth was primarily driven by a 25 percent rise in net interest income, amounting to Ksh85.99 billion ($653 million), and a 34 percent expansion in non-interest income, totaling Ksh59.94 billion ($455.1 million).
Equity Group recently announced plans to acquire a 91.9 percent stake controlling stake in Compagnie Générale De Banque Plc (Cogebanque) for RWF54.68 billion ($48.2 million). This move aligns with the company’s strategic intent to diversify its earnings and revenue.
