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Report: Equity Group postpones African expansion plans amid slow economic growth

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Report: Equity Group postpones African expansion plans amid slow economic growth

Equity GroupHoldings Ltd. CEO James Mwangi told Bloomberg News that the Kenyanlender will delay its African expansion plans amid slow economic growth across thecontinent, caused by the decline in prices of commodities such as oil andcopper.

Mwangi reportedly said the bank still aims to be operatingin 15 countries in a decade, but for now it will aim to strengthen its presencein existing markets by growing branch networks. Plans to move into Nigeria,Angola, Ghana, Mozambique and Zambia will be deprioritized, he added.

Equity Group remains ready to enter the Ethiopian market assoon as it receives approval for a license, and it plans to launch mobilebanking services in Rwanda, Tanzania, Uganda and the Democratic Republic ofCongo in 2016, Mwangi said. In the Republic of Congo, where Equity Group hasopened 19 more branches, the bank expects to more than double the number of accountsin 2016, boosting loan growth to 60% from 49% in 2015.

Mwangi also reportedly said thelender is not planning to make any acquisitions in Kenya, although he believesthat the country's 43 banks are excessive for the size of its economy.

The CEO was speaking after EquityGroup reported first-quarter profit after tax of 5.1 billion Kenyan shillings,up from 4.3 billion shillings in the year-ago period. The bank said its loanbook grew 22% year over year to 275 billion shillings, while it expanded itsgovernment securities portfolio to 62 billion shillings from 49 billionshillings in a bid to take advantage of interest rates near 20% on treasurybills and bonds.

As of May 10, US$1 was equivalent to 100.69 Kenyan shillings.