Kenya’s Equity Group hunts for acquisitions in Zambia, Angola and Mozambique

Kenya’s Equity Group is seeking acquisitions in Angola, Zambia and Mozambique to tap fast growth driven by infrastructure development and rich mineral resources, its chief executive said on Wednesday. The banking group, which began 35 years ago as a rural building society in central Kenya, has grown into the country’s most profitable lender, outpacing foreign and local rivals. It has also been bolstered by expanding into neighbouring markets, including the acquisition of two banks in the Democratic Republic of Congo in 2015 and 2020, where Equity is now the second-largest lender.

The DRC plays a key role in a regional trade and transport corridor that Equity aims to expand into, CEO James Mwangi told Reuters. “There is an opportunity we can get in Angola, Zambia and Mozambique,” he said in an interview. “It’s not just about countries, it’s about following our customers and following trade routes,” he added, saying Equity wants to enter those markets at the “earliest opportunity”.

Alongside deposits of critical minerals such as copper and cobalt, the target nations have oil and natural gas resources and stand to benefit from the U.S.-backed Lobito transport corridor, which is at various stages of development. Banking across the region remains fragmented, led by pan-African groups such as Equity, Ecobank and UBA, alongside state-linked and local lenders. Credit penetration remains low, while exposure to government debt is high.

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Long-term growth prospects are supported by demographics, commodities and infrastructure investment but constrained by shallow capital markets, currency volatility and uneven regulation. Equity has opted for acquisitions rather than greenfield expansion, saying that setting up new operations in structurally different markets – often with language and cultural barriers – can be difficult. “It will be good to look for opportunities that are very well established and then transform and scale,” Mwangi said, pointing to the DRC where the two acquisitions helped Equity build a 24% market share.

“That has taught us that we are good at mergers and acquisitions,” he said. Equity has had a representative office in Ethiopia for seven years and is closely watching plans to open the banking sector to foreign lenders, Mwangi said, adding the group aims to pursue an acquisition once full operations become possible.

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