Kenya's bank giant Equity Group suspends African expansion plans as economies slow

“This is not the moment to think about expansion. You’d almost be insane to think of setting up in those countries" - CEO James Mwangi

EQUITY Group Holdings Ltd., Kenya’s biggest bank by market value, put plans to expand into five other African countries on hold after sliding prices for commodities from oil to copper caused currencies to tumble. 

The lender, which had prioritised entries into Nigeria, Angola, Ghana, Mozambique and Zambia, will instead focus on deepening its presence in markets in which it already operates by growing branch networks, Chief Executive Officer James Mwangi said. “We do still have an ambition to be in 15 countries within the next 10 years,” he said in an interview in the capital, Nairobi, on Tuesday. But with economic growth slowing around the continent, “this is not the moment to think about expansion. You’d almost be insane to think of setting up in those countries.” 

Equity Group, which has units in six African countries, is still ready to enter Ethiopia as soon as it is granted a license, while it will start mobile-phone banking services in Rwanda, Tanzania, Uganda and Democratic Republic of Congo this year, Mwangi said. 

The lender has opened 19 additional branches in the Congo, where it expects to more than double the number of new accounts this year, helping to boost growth in loans by more than 60%, compared with 49% in 2015. 

The company earlier reported a 20% increase in first-quarter profit to 5.1 billion shillings ($51 million) after earnings from loans surged.

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