Equity renews international expansion drive
By Nairobi Stocks Review
Equity Group (EQTY) has opened an office in Ethiopia and intends to begin operations there as early as next month. The Ethiopia entry is part of the bank’s second phase of international expansion. Equity already operates in five countries, Uganda, Tanzania, Rwanda, South Sudan, and the Congo. Equity is also in the process of purchasing banking operations of Atlas Mara Limited in Zambia, Mozambique, Tanzania and Rwanda. If the Atlas Mara deals are finalized and the Ethiopia shop opens next month as expected, Equity would have a presence in eight African countries outside its Kenyan home market.
The lender wants to use the second phase of its international expansion to further extend its footprint in Africa, and it aims to have established a presence in 10 African countries by the end of the year. Equity is counting on the international expansions to allow it to unlock economies of scale.
Besides Equity, Kenya Commercial Bank (KCB) is another major Kenyan lender eyeing the Ethiopian market. KCB opened an office in Ethiopia in 2015 and hopes to begin operations in the country by the end of next year. For nearly four decades, the Ethiopian banking sector has been shut to foreign lenders. But the Ethiopian government is undertaking major economic reforms that include opening the banking sector to foreign players. That is why Equity, KCB and other Kenyan lenders are lining up to set up shops in Ethiopian in anticipation that they finally be allowed to operate in the country. Ethiopia is home to more than 100 million people, according to World Bank data, making it an attractive market for Kenyan lenders seeking expansion in Africa.