Regional integrated financial services firm, Equity Group, with banking interests in Rwanda, Uganda, South Sudan and Kenya, has now joined the nascent Rwanda Stock Exchange (RSE) as part of its regional development strategy.
The cross listing marks a major milestone for the recently reorganised firm which is seeking to enhance its integrated financial solutions delivery capacity. The Group, has banking operations in the five East African Community countries with an additional five non-banking subsidiaries, across the region engaged in provision of investment banking, custodial, insurance agency, philanthropy, consulting and infrastructure services.
At the RSE, Equity Group Holdings, has now listed for trade over 3.7 billion issued ordinary shares, at a par value of Rwf 3.76 (Ksh 0.5) following the regulatory approval of the Capital Markets Authority of Rwanda. At a market capitalization in excess of $2 billion, Equity Group Holdings becomes the largest listed company at the Rwandan bourse.
Speaking during this year’s Capital Markets East Africa International conference in Kigali, the Group’s Managing Director Dr James Mwangi welcomed the bank’s customers and partners in Rwanda to acquire the firm’s shares and share in its success.
“This is a momentous occasion for Equity Group Holdings, as we invite and extend an opportunity to the local investors a chance to share in our success as part owners of East and Central Africa leading financial services provider.”
To foster capital markets growth in the region, the Government of Rwanda and International Finance Corporation (IFC), a member of the World Bank Group, are hosting a high-level international conference on Capital Markets East Africa. Running under the theme Accelerating Economic Development, the conference’s key agenda is capital market development in East Africa – opportunities and challenges – towards serving as foundations for long-term and inclusive economic growth.
Rwanda’s Minister for Finance Claver Gatete noted that developing countries stand to gain from their capacity to mobilise development resources through the capital market avenue.
“The purpose of cross listing is to facilitate the availability of shares to the wider East African market. The cross listing will provide an easy and efficient way for our stakeholders and partners in Rwanda to participate beneficially in the growth and fortunes of the Company through partial ownership. This is in addition to the several efforts being made by the Group to localize the brand and customize services to better serve the people of Rwanda.”
RSE Chief Executive Officer Pierre Celestin Rwabukumba welcomed the Group to the Rwandan bourse and further confirmed that equities from the banking and financial sector are now the fastest growing securities across the region.
“We are very excited at the performance of the banking sector which now features three listed securities following the entry of Equity Group Holdings.”
The RSE, which is East Africa’s youngest bourse, features a list of six actively traded equity securities and four bond listings.
The listing comes hot on the heels of the recent corporate reorganization of Equity Group. In a strategic effort geared at setting the pace for the rollout of the Bank’s 3.0 corporate strategy, Equity Group shareholders ratified a proposal to establish Equity Group Holdings Limited (EGHL) late last year to act as the Group Holding Company.
The new holding company (EGHL) now owns both the Equity banking and non-banking subsidiaries and will provide strategic, brand, risk and talent management, governance and leadership solutions to its subsidiaries.
Last year, Equity Bank Group saw its profit after tax for the third quarter grow by 26 per cent to Ksh11.2 billion up from Ksh8.9 billion in the same period 2013.
With a complement of over 9.2 million customers, the bank’s net income recorded enhanced growth during the trading period ending September 2014, in what Mwangi attributed the growth to increasing economic activity across the region as inter country and regional trade within the East African community rose to above 30 per cent.
The bank’s successful implementation of its regional expansion strategy saw Equity Bank Tanzania, Uganda, Rwanda and South Sudan subsidiaries collectively post a 51 per cent and 137 per cent growth in deposits and a profit after tax respectively promising growing contribution by the regional subsidiaries going forward.
Additionally, the bank’s strategy to grow its alternative strategic income streams was further reaffirmed with a growth of 23 per cent being realised against the bank’s net interest income growth of 9 per cent Merchant business commissions posted a 69 per cent growth while insurance, custodial and brokerage fees rose by 35per cent, Diaspora remittances grew by 19 per cent and foreign exchange trading income by 15 per cent.
As part of the Equity 3.0 Strategy, the Group plans to enhance its payment systems significantly on all fronts with a focus on mobile based banking platforms.
Equity Group Holdings is maintaining an active Pan African regional expansion strategy in line with the Group’s vision to be the champion of social economic transformation of the people of Africa.
The entry to Uganda marked the first stride in the Group’s regional expansion strategy. Equity Bank Uganda Limited (EBUL) started in July 2008 when the Company successfully acquired a 100 per cent stake in Uganda Microfinance Limited (UML). In South Sudan, Equity Bank South Sudan (EBLSS) started its operations in May 2009.The strong financial base of the EBLSS is underpinned by the Group’s massive capital base and regional spread.
Equity Bank Rwanda is now one of the leading commercial banks in Rwanda licensed and regulated by the National Bank of Rwanda. Equity Bank Rwanda Limited commenced its operations in October 2011.
In Tanzania, Equity Bank (Tanzania) Limited opened its doors for the first time in February 2012.
As at September 2014, the regional subsidiaries in Rwanda, Uganda, Tanzania and South Sudan, had a collective base of 1,180,110 customers, Ksh50.95 billion in customer deposits and Ksh67.5 billion worth of assets.