A man counts Kenyan Schillings, the currency of Kenya, in Nairobi, Kenya, on Thursday, Feb. 25, 2010. Photographer: Trevor Snapp/Bloomberg
A man counts Kenyan Schillings, the currency of Kenya, in Nairobi, Kenya, on Thursday, Feb. 25, 2010. Photographer: Trevor Snapp/Bloomberg

Kenya’s biggest bank CEO says deals hunt on despite pandemic

By Bloomberg Time of article published Sep 25, 2020

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JOHANNESBURG - After ending some acquisition plans and scrapping dividends to survive the coronavirus pandemic, Kenya’s biggest bank has cash available for new deals, said Chief Executive Officer James Mwangi.

Equity Group Holdings Plc is looking out for targets after talks to take over Bob Diamond’s Atlas Mara Ltd.’s businesses in four African markets fell through in June. It concluded the purchase of Banque Commerciale Du Congo at a discounted $95 million last month, with sellers wary of the pandemic.

The lender has long-held ambitions to expand across Africa and plans to operate in 15 countries on the continent, serving 100 million customers, by 2026. It’s in six markets currently. The company’s decision to withdraw dividends for 2019, its first such action in 16 years, enabled it to retain $100 million.

“We are in a position of strength to take advantage of any opportunities that may arise,” Mwangi said in an interview.

The bank expects to restart dividends once the disruption from the pandemic has passed, Mwangi said. The money “is not being threatened in any way, it is not required for liquidity, it is not required to meet default. So it may be available to be paid out to the shareholders at the right time.”

Equity Group’s pan-African push could result in the bank making 40% of its revenue outside Kenya, up from 25% in 2019. That is also likely to help the bank expand it’s balance sheet to 1 trillion shillings ($9.2 billion) by end-of-year from about 950 billion shillings currently.

“It is now clear that the ambition of Equity to reach a trillion shillings balance sheet is in sight,” Mwangi said. “If we miss it this year, it will be narrowly, and it will be accomplished by next year.”

BLOOMBERG

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