Equity Group Marches on Across Africa With Fresh Congo Purchase

NAIROBI (Capital Markets in Africa) – Equity Group Holdings Plc plans to acquire a lender in the Democratic Republic of Congo, the second purchase in four months, as part of the Kenyan bank’s strategy to expand across Africa.

“Directors have agreed to the entry into a non-binding term sheet with certain shareholders of Banque Commerciale du Congo for the purchase for cash of a controlling stake in BCDC with a view to eventually amalgamating the business of BCDC with that of EGH’s existing banking subsidiary in DRC,” Equity said in an emailed statement on Monday.

Equity did not reveal how much it will pay for the stake in the Congolese lender established in 1909.

In April, Equity agreed to swap a 6.27% shareholding for Atlas Mara Ltd.’s operations in Rwanda, Zambia, Mozambique and Tanzania, a transaction valued at about $106 million. Kenya’s biggest lender by market value now has operations in eight African nations following that transaction and targets to be in 15 markets on the continent by 2026.

Moody’s Investors Service last week said banks in the DRC face “very difficult credit conditions as a result of high credit concentration, rapid credit growth and dollar-denominated lending.”

The Kenyan lender acquired ProCredit Bank Congo SA in 2015 — now renamed Equity Bank Congo — and has grown the unit’s value to 60 billion shillings ($578 million) from 15 billion shillings, Chief Executive Officer James Mwangisaid in March.