2 April 2009

Uganda: Equity Bank Kenya to Cross-List in Country

Kampala — EQUITY Bank Kenya is to cross-list on the Uganda Securities Exchange (USE) in two months, Dr. James Mwangi, the group's chief executive officer, has said.

"We have lodged our application with USE and the Capital Markets Authority," he said on Monday at the launch of the bank's operations in Uganda.

Equity Bank Kenya in April last year bought 100% stake in Uganda Microfinance Limited to form Equity Bank Uganda.

Dr. Mwangi said the bank, which would launch operations in Southern Sudan this month, was also eyeing Rwanda, Tanzania and South Africa.

"We will endeavour to replicate Equity's successful business model to customers in the region to provide customer-focused services," he promised.

If Equity Kenya's model is replicated here, customers should look forward to cheaper credit."

The bank, which already has 34 branches, will be supported by an asset base of $1.1b, making it one of the most capitalised banks in the region.

Equity Kenya posted a 46.6% rise in pre-tax profit of Ksh23.9b in 2008 and boasts of 3.3 million deposit accounts, representing 49% of bank accounts in Kenya. The bank is currently servicing 600,000 borrowers.

Equity Uganda is looking at capturing the mass market through providing cheap deposit accounts, which don't require opening balances and need minimum operating balances.

"We are focusing on small and medium enterprises. That's why our main office is in Katwe. We have abolished monthly maintenance fees and ledger fees to encourage people to save," Charles Nalyaali, the managing director of Equity Bank Uganda, said.

He said the bank had about 300,000 customers with an asset base of sh125b.

The bank will open five more branches and add another 12 automated teller machines to the existing 22.

The central bank's deputy governor, David Opiokello, who launched the bank, noted that robust growth in the financial sector had raised new managerial challenges of risk management.

"Equity Bank will be required to maintain a comprehensive risk management framework, prudently identify, measure, monitor and control all risks inherent in major banking activities," he said.

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