Equity Group has acquired an additional 7.7% stake in Equity Bank Congo (EBC) from German sovereign wealth fund KfW. This latest acquisition is valued at Ksh. 996 million ($9 million) as part of a strategy to consolidate its banking subsidiaries in the Democratic Republic of the Congo (DRC).

This has consequentially raised Equity’s ownership in EBC to 94.3% and marked the latest investment in the subsidiary since its initial purchase of 66.53% stake in August last year.

“On November 27, 2020, Equity bought shares previously held by KfW in Equity Bank Congo S.A. for a consideration of $9 million (Sh996 million),” Equity noted in a statement.

Shortly after, Equity merged EBC with its second bank in DRC, Banque Commerciale Du Congo (BCDC), in which it had recently acquired a 66.53% stake at a cost of Ksh. 10.2 billion ($95 million). The merged bank, the second-largest in DRC with an asset base of Ksh. 322 billion ($3 billion), was renamed EquityBCDC.

“Post-merger, Equity holds 75.5% in EquityBCDC with the remainder being held by IFC (International Finance Corporation), the government of DRC and other minority shareholders,” Equity stated in a report.

The new deal with KfW is expected to help Equity in enlarging its stake in the merged entity and underlines its confidence about DRC’s banking prospects. Equity has now spent a cumulative Ksh. 17 billion in DRC, making it the second most significant market after Kenya in which the lender has invested a total of Ksh. 43 billion.

In its latest financial report for the year ending December 2020, the DRC banking operation was the second most profitable subsidiary as it reported pre-tax earnings of Ksh. 1.6 billion. This amount represents 7.3% of the group’s total of Ksh. 22.1 billion.

Equity has disclosed that it made the equivalent of Ksh. 5.6 billion in the form of commissions on transactions including foreign exchange trades in the year ended December 2019. This accounted for 46.6% of the total income of Ksh. 12 billion over the same period.