This archive report was first published on 23 June 2020.
Equity Group Holdings Plc, the largest bank on the Nairobi Securities Exchange by market capitalization, has called off its proposed acquisition of banking businesses from Atlas Mara (ATMA) in Rwanda, Tanzania, Zambia, and Mozambique. The decision was made in light of the uncertainty of risk and the COVID-19 pandemic's impact on the global economy.
As reported in January 2020, the Board of Directors of Equity Group Holdings Plc had extended discussions with ATMA following the expiry of the transaction period. The two parties had agreed to continue further discussions to reach mutually acceptable commercial terms.
However, in a recent announcement, Dr. James Mwangi, Managing Director and CEO of Equity Group Holdings Plc, stated that the Board has considered the events that have taken place since January and the impact of the COVID-19 pandemic on the world and the economies in which Equity operates. After careful consideration, Equity and ATMA have mutually agreed to discontinue discussions on the transaction for the foreseeable future.
Dr. Mwangi emphasized that the Board's decision is in line with its Business Continuity Management, which focuses on risk assessment, prudent risk mitigation, and management in the prevailing economic slowdown. The Group is committed to conserving cash and liquidity to support its customers during the economic crisis and to recover and thrive post the crisis.
Equity Group Holdings Plc has deployed a defensive and offensive mechanism through loan accommodations and rescheduling/restructuring of up to 25% of the total loan book for periods of up to 36 months. This will enable its customers to go through the prevailing turbulence while preserving cash to shore up the financial revival and growth of their businesses post the COVID-19 crisis.
On the offensive approach, the Group is focused on accelerating the push to digital channels and growing the various non-funded income franchises while re-evaluating the acquisition of new businesses where significant capital injection and managerial attention is required.
Dr. Mwangi concluded by saying that the Group is committed to its strategic objective of expanding its footprint in Africa to provide access to competitive, tailored financial services to improve people's lives and livelihoods while also delivering significant value to its stakeholders.
