DRC has become a meaningful market for Equity Bank since acquiring BCDC in 2019. In the financial results for the nine months to September 2023, the DRC subsidiary contributed about one in every Sh3 of the group's net profit.
Equity Bank reported a net profit of Sh34.6 billion, with the DRC subsidiary reporting a net profit of Sh11.4 billion.
In terms of assets (such as loans), DRC contributes one out of every Sh3, which sits on the bank’s balance sheet - which combines all the six countries that Equity has a presence.
This number has continued to grow aggressively over the last two years and I’m expecting it to grow even further to more than 40 per cent of the overall group because the DRC is growing quite rapidly.
Kenya is not growing at the same rate. Equity has about 28 per cent of the market share in DRC, in a country with a vast population of 100 million people, and the banking penetration rate is obviously quite low given that there has not been a sophisticated market in the past.
Based on this, the growth perspective is quite significant, and it is achievable for Equity Bank to grow to 25 million customers (roughly about half of Kenya’s current population) in DRC in the medium term.
The bank has about 1.8 million retail customers in DRC. To achieve the same, taking into consideration the size of the country, Equity will need to scale up its branch and agency network in the vast country.
As of the end of June 2023, Equity had 127 branches in the country.
We expect Equity to complement those branches by growing the agency network.
We have been able to see Equity grow its branch and agency network in Kenya and that is the model we will see them import into DRC. In addition to this, there is a hidden value in Equity Bank’s DRC operations.
Another potential area of innovation for Equity Bank is on the technological front but it is still in the early days given that the connectedness of the country is still relatively poor.
But as mobile and internet penetration grows, it will enable the bank to push its products and acquire clients through its digital channels.
The writer is the director of Sub-Saharan banks at EFG Hermes