Monday April 16 2018

Equity injects Sh36 billion more in Uganda unit

Equity Bank CEO James Mwangi (left) and

Equity Bank CEO James Mwangi (left) and shareholder Sally Chepkorir during the release of lender’s results last month. FILE PHOTO | NMG   

By Victor Juma

Equity Bank Group last year invested an additional KSh1 billion (Shs36 billion) in its Ugandan subsidiary, its second most profitable unit after the Kenyan banking operation.

The new cash shored up the subsidiary’s capital but left Equity’s interest in the unit unchanged at 100 per cent.

This is the latest capital injection in a subsidiary after the Kenyan banking multinational invested an addition KSh2.2 billion in Democratic Republic of Congo operation in 2016, a move that raised its stake from 79 per cent to 86 per cent.

“On 7 July 2017, Equity Group Holdings Plc issued additional share capital of US$ 10 million (KSh1.04 billion) to Equity Bank Uganda Limited,” the Nairobi Securities Exchange-listed firm said in its latest annual report.

“There were no additional shares received against the additional capital but the par value of the issued and paid up share capital increased from USh100,000 to USh238,992 per share.”

The new capital raised the value of the company’s investment in the unit to KSh5 billion from the previous KSh3.9 billion. The subsidiary also took a KSh2.2 billion loan from the European Investment Bank in the review period.

Equity says the Ugandan operation had a pre-tax income of Sh1.1 billion in the year ended December, an 89 per cent increase from KSh628 million the year before.

Its profitability is second only to the Kenyan banking unit, which reported pre-tax earnings of KSh23.8 billion or 88.6 per cent of the group’s total before-tax income of KSh26.8 billion in the same period.

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