Equity Group Holding announced it had entered into an agreement with the Commercial bank of the Congo Banque commercial du Congo by assets.
The regional lender aims at merging its business with that of the existing Congolese subsidiary. It is on course to establish a presence in ten African countries with a cautious entry into Zimbabwe which is currently weighed down by a volatile exchange rate and hyperinflation.
The takeover of the Zimbabwean lender BancABC (Zimbabwe) which serves both corporates and retail was part of Equity’s grand Atlas Mara deal. With the deal, Equity gains entry into two additional countries Zambia and Mozambique through acquisitions.
BancABC is officially known as ABC Holdings and is a fully owned subsidiary of Atlas Mara which acquired the bank in 2014 for an estimated $265 million. It has subsidiaries in Mozambique, Tanzania, Zambia and Zimbabwe.
In April, Equity Bank entered into an agreement with Atlas Mara to acquire 100 per cent shareholding in BancABC Zambia, Tanzania, Mozambique and Zimbabwe. The agreement also included 62 per cent of the shares of Banque Populaire du Rwanda Ltd. However, Equity put the deal on hold on the acquisition of BancABC (Zimbabwe) pending improvement in the country’s macroeconomic environment.
In return, Equity will surrender new ordinary shares estimated 252.5 million which represents 6.27 per cent of the bank to Atlas Mara valued at $107 million.
Despite BancABC reports on an estimated net profit of $62 million from January to June 30 this year compared with $4 million in the same period last year, the bank said in October that the volatile exchange rate caused by the country’s estimated $9 billion high public debt has exerted some difficulties on its operations.
Estimates of Zimbabwe’s inflation had risen to 175 per cent by mid this year. This sparking fears that the country was entering a new period where prices of goods and services rise more than 50 per cent in one month. This arose after the Zimbabwean Central Bank banned the US dollar and South African rand from being legal tenders and allowed the country to revert to the Zimbabwean dollar.
By 2024, Equity group Holding is hoping to establish a presence in between 15 and 18 countries. It currently operates in six countries that is Kenya, Uganda, Tanzania, Rwanda, South Sudan and the Democratic Republic of Congo.