Kenya’s biggest bank, Equity Bank, has declared interest in buying parts of Barclays Africa’s operations. Chief Executive Officer of the bank, James Mwangi said he saw potential acquisition opportunities following Barclays’ decision to reduce its stake in its African operations.
Barclays has operations in some African countries and taking up its ‘spoils’ will afford the Kenyan bank the platform it needs to expand. Apart from Kenya, Equity Bank operates in Uganda, Tanzania, South Sudan, Rwanda and the Democratic Republic of Congo.
“It is true that they have a very good franchise in Botswana,” the Equity Bank CEO said but was quick to add that Barclays has “a very good franchise in Kenya and Ghana, fair franchise in Uganda and Tanzania. Those are markets that we have ambition to be in or where we have presence and since we want to increase our market share in those countries this provides us a huge opportunity.”
The CEO said he is expecting a return on assets of 5% and a return on equity of 30% by the end of this year. The bank has maintained a return on assets rate of 4.5% and a return on equity rate of about 25% in the past five years. These will be mainly driven by profit from regional markets.
“The turbulence and turmoil in currency exchange rates seems to be over. We are headed almost to a stable macroeconomic environment where inflation has started coming down, where exchange rates have stabilized and can most likely only come down,” Mwangi said.
Weaker currencies in Uganda, Tanzania and Kenya last year drove up prices and led to foreign exchange losses. But the Equity Bank boss said a steadier environment this year would boost earnings.