Tanzania tycoons buy Kenya’s Equity Bank shares worth Sh7.7bn

Tanzanian billionaires Aunali and Sajjad Rajabali have bought seven million shares of Equity Group worth Sh7.7bn ($3.4 million), expanding their investment in Nairobi Securities Exchange-listed firms.

Their purchase of the bank’s stock is disclosed in the lender’s May regulatory filing of its ownership structure.

The duo has invested more than Sh33.7 billion ($14.8 million) in NSE-listed firms over the past two years, taking significant stakes in companies such as Co-op Bank, KenolKobil, Jubilee Holdings and I&M Holdings.

The Rajabalis are now ranked seventh in Equity’s list of top individual investors with a 0.19 per cent stake.

Most efficient bank

Equity has cemented its position as the country’s most efficient bank with an annualised return on equity (RoE) of 28.5 per cent after reporting a 21.4 per cent growth in net profit to Sh130 billion ($57.4 million) in the first quarter ended March.

The lender’s performance, anchored on its retail banking success, has attracted major global investors.

“The bank differentiates itself from its peers through its large retail customer base with nearly half of all bank accounts in Kenya,” London-based asset manager Blackrock Frontiers Investment Trust Plc, which holds Equity shares worth Sh33.7 billion ($14.8 million), says in a regulatory filing.

The bank has in recent years moved to strengthen its existing regional operations, postponing entry into new markets.

The lender last year invested an additional Sh22.5 billion ($10 million) 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.

Latest capital injection

This is the latest capital injection in a subsidiary after the Kenyan banking multinational invested an addition Sh49 billion ($21.8 million) in Democratic Republic of Congo operation in 2016, a move that raised its stake from 79 per cent to 86 per cent.

The new capital raised the value of the company’s investment in the Uganda unit to Sh112.6 billion ($49.5 million) from the previous Sh87.8 billion ($39 million).

The subsidiary also took a Sh49 billion ($21.8 million) loan from the European Investment Bank in the review period.

Equity says the Ugandan operation had a pre-tax income of Sh24.7 billion ($10.9 million) in the year ended December, an 89 per cent increase from Sh14  million (46.2 million) the year before.