Kenya’s Biggest Bank Said to Plan Ethiopia Hub as Sector Opens
Kenya’s Biggest Bank Said to Plan Ethiopia Hub as Sector Opens
(Bloomberg) -- Equity Group Holdings Plc set up a representative office in Ethiopia as the East African nation opens up its financial sector.
Hassan Maalim will lead the office in Addis Ababa, which should be fully operational in July, Kenya’s biggest bank by market value said in a statement on Thursday after Bloomberg reported its plans.
The bank’s “entry into Ethiopia is part of our phase two expansion in pursuit of our aspiration of being a pan-African bank with presence in 10 African countries by the end of the year,” Chief Executive Officer James Mwangi said. It “will enable the bank to continue to scale up and unlock economies of scale especially in this era of digitization and virtualization of banking.”
Equity Group is the second Kenyan bank to set up in Ethiopia after KCB Group opened a representative office in the capital, Addis Ababa. The bank’s entry into the country will give the lender access to a combined 500 million people in the six markets it operates in including Uganda, Tanzania, Rwanda, South Sudan and the Democratic Republic of Congo.
‘Big Deal’
The lender is “getting some ground in Ethiopia, and that’s a big deal for any bank trying to expand beyond Kenya,” Faith Mwangi, senior investment analyst at Tellimer Markets Inc., said by phone. Ethiopia “is especially attractive for tier one Kenyan banks looking to scale beyond the rate cap environment at home.”
Related: KCB Group Open to Ethiopian Buy to Extend Regional Footprint
Ethiopia, which has 18 commercial banks serving more than 100 million people, is working with the World Bank to open up its financial sector to foreign investment. The industry has been closed to foreign investors since a Marxist junta nationalized lenders four decades ago. Significant changes may include the establishment of a capital market and the modernization of the nation’s payment system.
To contact the reporter on this story: Bella Genga in Nairobi at bgenga2@bloomberg.net
To contact the editors responsible for this story: Paul Richardson at pmrichardson@bloomberg.net, Stefania Bianchi, Shaji Mathew
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