, NAIROBI, Kenya, Oct 31 – Equity Bank Group has announced restructuring plans that will see it form a new holding company and subsidiaries before the end of the year.
The new company will be called Equity Group Holdings Limited and will be overseeing other subsidiaries which are at the moment operating in various countries in the region.
Equity Bank Group CEO James Mwangi said the new company will also be separate from Kenya’s operations, as will be the case with other regional branches.
“We now have about 10 subsidiaries, all owned by Equity Bank Kenya. But we are feeling the burden in that if anything happens outside there, it would affect the Kenyan bank. What we have now decided is to make Kenya a banking operation and form a group company,” Mwangi explained on Thursday during an investors briefing.
Some of the subsidiaries will now be Equity Bank Kenya Limited, Equity Bank Uganda Limited, Equity Bank Tanzania Limited, Equity Bank South Sudan Limited and Equity Bank Rwanda Limited.
“Kenya is interesting because we are seeing it account for 90 percent of our business. So we are seeing the group CEO also overseeing Kenya so that he will be checking the most important subsidiary of the group.”
The holding company will be the one listed at the Nairobi Securities Exchange (NSE) as Equity Group Holdings Limited and “shareholders will not be affected by the changes”.
Mwangi said the bank has already received preliminary approvals from the Capital Market Authority (CMA) and Central Bank of Kenya (CBK).
On November 24, the board will be calling for an Extra Ordinary Meeting to seek approval from the shareholders and later get a final go-ahead from CMA and CBK.
“We want to separate Kenya’s banking operations and the holding company so that we can have two separate management; one serving our customers and the other one investing, acquiring, merging and allocating capital to all other subsidiaries,” he said.
Meanwhile, he allayed fears that there will be layoffs during their restructuring process adding that this may not happen any time soon.
“In the last two months Equity bank has employed at least 600 new staff. Equity is on an expansion strategy and we have never, over the last 20 years retrenched and I can say it will not happen in the next ten years,” he assured.
This comes at a time when the bank is seeking to launch its thin SIM technology through its Mobile Virtual Network subsidiary Finserve Africa Limited.
Updating on the progress, Mwangi said the bank expected to receive about 5million thin SIMs in the next few weeks before the official launch of the technology. At the moment that bank has distributed at least 200,000 normal SIM cards for customers with dual SIM handsets as well as selling phones to those without.
“There is a perception that we were given one year. Central Bank of Kenya (CBK) and Communications Authority of Kenya (CA) gave us unconditional licenses and its CA which said it will require one year to monitor the technology,” Mwangi said.