Equity Group CEO James Mwangi has revealed that the bank expects its recently unveiled operation in the Democratic Republic of Congo (DRC) to overtake it’s foundational Kenyan business within the next few years, in terms of asset base as well as revenue and profitability.
Mwangi highlighted the strong performance of the DRC business since its inception, describing it as “a juggler pipe that will change this (Equity) Group forever”.
Equity in February 2021 unveiled its new brand identity in DRC, Equity BCDC, after the successful merger of Equity Bank Congo (EBC) and Banque Commerciale du Congo (BCDC).
Equity Group had in July last year completed the acquisition of majority shares of BCDC from the family of George Forrest. The move made Equity BCDC the second largest bank in the Democratic Republic of Congo (DRC) with a balance sheet of USD2.7 Billion (Ksh295 million).
In an interview published on Friday, July 2, Mwangi expressed confidence that the DRC operation could play a key role in propelling Equity closer to the level of the likes of South Africa’s Capitec Bank – a tier-1 retail bank which offers services including savings, transacting and unsecured lending products to individuals.
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“DRC business will fundamentally change Equity Group. DRC at the moment contributes 27 percent of the group balance sheet and is growing at about 60 percent annually and may overtake Kenya between the third and fifth year.
“Even in profitability, DRC will start rivalling Kenya and rise above on profits and balance sheet size eventually.
“DRC has quickly made us a market leader in financial services both in balance sheet and profitability as well as customer base.
“Given the momentum of growth in DRC, the possibility of standing out and becoming more attractive is so near. Equity should now be trading at the same rate as Capitec Bank of South Africa,” he told Business Daily.
Mwangi further observed that the company was quick to implement lessons drawn from their previous East African ventures into new operations including DRC.
“Kenyan unit’s return on assets reached four percent in 16 years. Uganda has taken 14 and Rwanda 12.
“It means we are a learning organisation and we quickly deploy lessons into the business. So in DRC, we are likely to reach this in the next three years,” he asserted.
Equity’s plan in DRC included an accelerated digital strategy with a range of easily accessible financial products and services. This is in addition to an established network of over 74 branches and 3,000 agents.
“For the majority of Congolese who have to work everyday to earn a living, they won’t have to worry about making time to go to the bank to open a bank account.
“EquityBCDC has rolled out digital banking including mobile banking making banking something you do anywhere, anytime,” Equity BCDC Chief Executive Celestine Muntuabu noted at the launch ceremony, asserting that a stronger banking sector could go a long way in empowering ordinary people in society and transforming the Congolese economy.
At 86.79 Million, DRC’s population is almost double that of Kenya’s with the country also about 4 times bigger than Kenya in terms of size. Notably, the DRC might be on the verge of joining the East African Community (EAC) after President Felix Tshisekedi on Thursday, June 22 launched the EAC’s verification mission to the country, about two years after the DRC’s initial request to join the inter-governmental body.
The Summit of EAC Heads of State at its 21st Ordinary Meeting held on 27th February, 2021 considered the application by DRC to join the Community and directed the Council to expeditiously undertake a verification mission in accordance with the EAC procedure for admission of new members into the EAC and report to the 22nd Summit.