Pro Credit Bank, a subsidiary of Equity Group with operations in the Democratic Republic of Congo, has changed its name to Equity Bank Congo three years after Equity first announced the acquisition of the SME-focused lender.
Equity first acquired a 79.0 percent stake in Pro Credit Bank in September 2015 for 4.5 billion shillings in a share swap deal that saw the bank issue 70.8 million shares to investors exiting the subsidiary.
The transaction effectively valued the DRC-based lender at 5.7 billion shillings, an equivalent to 80.5 shillings per share.
Equity Group then acquired another 7.0 percent stake for 2.2 billion shillings in cash, an indication of its confidence in the future prospects of the bank.
Equity is among Kenyan lenders with ambitious growth strategies to gain market share in retail banking both locally and in the Eastern Africa market, as they seek fresh income streams in the wake of a tighter regulatory environment in the local market, which has capped the pricing of loans to 4.0 percent above the Central Bank Rate (CBR).
The Robin Hood Tax
The implementation of the “Robin Hood” tax of 0.05 percent on transactions worth 500,000 shillings and above has been suspended by the High Court, following a move by the Kenya Bankers Association (KBA) seeking to suspend the implementation of the tax.
Justice Wilfrida Okwany, in the conservatory orders issued on Thursday, noted that the petition raised fundamental constitutional concerns, among them being the principle of public participation. The Attorney-General, Mr. Kihara Kariuki, had termed the quest to suspend the Robin Hood tax premature as Parliament has not passed the relevant Bill into law.
The Attorney General took the position in response to KBA’s opposition to the tax on grounds that there was no stakeholder engagement prior to the operationalization of the law as required by the Constitution. The AG and the Kenya Revenue Authority (KRA), argued that Parliament has already invited public participation on the Finance Bill 2018, according to banks an opportunity to present their views on the Bill.