The CEO of Equity Bank, Dr. James Mwangi, announced that in two months, the bank intends to cross-list on the Uganda Securities Exchange (USE). In April of 2008, Equity Bank bought 100% stake in Uganda Microfinance Limited, therefore forming Equity Bank Uganda. For more details on this acquisition, please read this Microcapital article. The bank has already lodged its application with the USE and the Capital Markets Authority, Kenya’s market regulator.
Established in 1984, Equity Bank, considered one of the most capitalized banks in Africa, has 34 branches and will launch operations in Southern Sudan in April 2009. The bank is also looking to expand into Rwanda, Tanzania, and South Africa. To read more about Equity Bank’s expansion into Rwanda, Uganda, and Tanzania which will be funded by Helios EB, please read this MicroCapital article. According to MIX Market, the microfinance information clearinghouse, Equity Bank had a gross loan portfolio of USD 523 million in 2008, and as of December 31, 2007, it had total assets of USD 833 million, a return on assets of 5.29%, and a return on equity of 22.33%.
Following the business model of Equity Bank Kenyaís’ (Equity Kenya), the new bank intends to offer cheaper credit, on account of its large asset base of $1.1billion and numerous branches. To read the MicroCapital article on Equity Bank’s performance which earned it the Best Micro Finance Bank in Africa Award , please click here. Equity Kenya posted a 46.6% rise in pre-tax profit of KES 23.9 billion (USD 298 million) in 2008 and has 3.3 million deposit accounts, representing 49% of bank accounts in Kenya and servicing 600,000 borrowers.
Equity Bank Uganda intends to offer customer-focused services to the mass market through the availability of cheap deposit accounts, which do not require opening balances and require minimum operating balances. Equity Bank Uganda has about 300,000 customers and an asset base of KES 125 billion (USD 1.56 billion). Charles Nalyaali, the managing director of Equity Bank Uganda has stated the bank plans on opening five more branches and adding another 12 automated teller machines to the existing 22 machines. The bank would like to foster the development of small and medium enterprises through their cheap deposit accounts and eliminating monthly maintenance fees and ledger fees.
By: Andrea Chu
ADDITIONAL RESOURCES
Symbiotics, April 03, 2009: “Uganda: Equity Bank Kenya to Cross-List in Country”
MicroCapital Story, July 22, 2008: “Equity Bank of Kenya to Acquire Microfinance Institution (MFI) Uganda Microfinance in $26.9m Deal”
MicroCapital Story, December 19, 2007: “Equity Bank of Kenya to Expand Microfinance Services to Uganda, Tanzania, and Rwanda Backed by Investment from Helios EB”
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