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The lender’s entry into Zambia and Mozambique will enhance trade between East and Southern Africa
Kampala, Uganda | JULIUS BUSINGE | Equity Bank’s move to acquire banking assets of Atlas Mara in four African countries will create new opportunities for traders in the East African region, according to the bank’s Executive Director in Uganda, Anthony M. Kituuka.
Kituuka, who spoke to The Independent in an interview on May 03, said the new transaction will enhance trade flows between East Africa and Southern Africa as it strives for growth.
“We are optimistic that with our focus on the entire ecosystem around the various industry segments in these countries, the bank will be able to expand its lending portfolio right from the micro individual to the multinational corporate because it has the relevant skills, capacity and technology to do so,” he said.
He said traders hoping to tap into the emerging markets in these new markets will be in position to do so leveraging on the Equity Bank’s wide network.
Kituuka said the expansion will also provide opportunities for its staff to not only develop their careers in the Group through exchange programs but also gain a good understanding and knowledge of other markets and industries in the southern Africa.
Equity Bank’s parent company, Equity Group Holdings (EGH) announced on April 30 that it is acquiring assets of Atlas Mara in four African countries including Zambia and Mozambique, a step that place it ahead of other banks in East Africa to venture into central and southern Africa.
EGH plan to acquire a 62% shareholding in Banque Populaire du Rwanda in Rwanda and 100% shareholding in the African Banking Corporation Tanzania. The lender already has operations in these two countries.
The Bank also seek to acquire 100% shareholding in the African Banking Corporation Zambia and the African Banking Corporation Mozambique.
Following the KShs10.7billion (Shs396.8billion) transaction that is subject to regulatory approval from the respective countries, Atlas Mara will become shareholder in EGHs.
“Until further announcements regarding the transaction are made, EGH said that investors are advised to exercise caution while dealing in EGH ordinary shares on the Uganda, Rwanda and Nairobi securities exchange,” James Mwangi, the Group Managing Director and Chief Executive Officer at EGH.
This comes four years since the Equity Bank entered the Democratic Republic of Congo market through a 79 % acquisition of SME-focused ProCredit Bank in 2015.
Atlas Mara is a subsidiary of Fairfax Africa Holdings Corporation, a Canadian company listed on the Toronto Stock Exchange whose investment objective is to achieve long term capital appreciation while preserving capital by investing in public and private equity securities and debt instruments of African businesses or other business with customers, suppliers or business primarily conducted in or dependent in Africa.
On the other hand, the Nairobi listed Bank has operations in six countries including Kenya, Tanzania, Uganda, Rwanda, South Sudan and DRC.
Last year, Equity Bank maintained its position as Kenya’s second-most-profitable lender as strong growth in income from government securities lifted its net profit by 5% to Shs 723.25bn.
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