KENYA – Equity Bank, a financial service provider is on course to takeover of the Zimbabwean lender BancABC Bank that serves as both corporates and retail as it establishes a presence in 10 African countries.
A cautious entry into Zimbabwe, a country currently weighed down by a volatile exchange rate and hyperinflation was part of Equity’s grand Atlas Mara deal, which saw the region’s largest lender by customer numbers enter two additional countries Zambia and Mozambique— through acquisitions.
In April, Equity Bank entered into an agreement with Atlas Mara to acquire 100 per cent shareholding in BancABC Zambia, Mozambique, Tanzania and Zimbabwe including 62 per cent of the shares of Banque Populaire du Rwanda Ltd. Equity however dropped the acquisition of BancABC (Zimbabwe).
“Zimbabwe was part of the Atlas Mara transaction but we excluded it. We expect to resume negotiations once there is improvement in the macroeconomic environment. There is no specific date because it all depends with the economic environment,” said Equity Group’s chief executive James Mwangi.
“We started our acquisitions with southern African countries and Zimbabwe is the only country that is left out. What informs our expansion in these countries is the level of their financial needs,” he added.
“The underperformance across most of the BancABC banks during 2018 remains a concern, and we have taken steps to address these performance challenges, including the proposed transaction with Equity Group Holding.
Equity, which currently has operations in six countries—Kenya, Uganda, Tanzania, Rwanda, South Sudan and the Democratic Republic of Congo and a commercial office in Ethiopia—is hoping to establish a presence in between 15 and 18 countries by 2024 with a customer base of more than 100 million clients as part of its ambitious Pan-African expansion drive.
The transaction is expected to be completed by December this year subject to shareholder and regulatory approvals.