Equity Bank is one of the largest commercial bank in Africa by customer numbers and also the largest bank on the Nairobi Stock Exchange by asset base. Founded in 1984, the bank has recorded multiple milestones including its commercialization as a fully-fledged bank in 2004 and it’s listing on NSE in 2006.
The bank has expanded is customer base to over 14 million people spread across six African counties. Equity also continues to support various projects in East Africa.
According to reports, about 63 per cent of the bank is owned by multiple shareholders, most of whose ownership is below 1 per cent. The majority shareholder in the bank is the investment vehicle, Arise B.V. Other majority shareholders in Equity include; the International Finance Corporation (IFC) and the IFC Financial Institutions Growth Fund which acquired a 6.71 per cent stake in the lender which was previously owned by British American Investments.
Others include; Stanbic Nominees (3.55 per cent), James Njuguna (3.39 per cent), ESOP (2.81 per cent), and Fortress Highlands Limited (2.68 per cent).
In this article, WoK details Arise’s ownership in Equity Group among its other investments in Africa.
Arise B.V
Arise was established as an investment and development company by Norfund, Rabobank, FMO and NorFinance, under joint ownership in August 2016. The four founding companies agreed to transfer their various equity holdings in financial institutions in sub-Saharan Africa to Arise’s portfolio.
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According to Norfund, the aim of founding Arise was to contribute to the building of economic growth and poverty reduction by developing strong and stable financial service providers in Sub-Saharan Africa.
“These will support retail enterprises, SMEs, companies in rural areas, and other clients lacking access to financial services. Arise will thereby strengthen their ability to empower themselves,” the company states.
Arise targets financial institutions that focus on SMEs and other businesses that lack access to stable banking and provides them with a clear additional effect. These institutions also receive assistance from Arise’s banking development team with regard to growth strategies and deploying new technologies.
“It is our conviction that larger banks have the ability to contribute more strongly to economic development than smaller institutions. However, the availability of sizable equity stakes in such larger institutions are rare and thus making Arise’s portfolio unique in an African context,” Norfund states.
Arise shareholders
Norfund – is a Norwegian Investment Fund for Developing Countries that was established by the Norwegian Parliament in 1997 with the objective to reduce global poverty by contributing to the growth of sustainable commercial enterprises in developing countries.
The fund offers equity, venture capital and other loans to companies in selected countries and business areas where the private sector lacks sufficient capital to grow and develop viable businesses.
NorFinance – is a joint venture investment company between Norfund and Norwegian private investors, established with an aim of mobilising private Norwegian capital for financial service providers in Sub-Saharan Africa.
Norfund and NorFinance are the majority shareholders of Arise.
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FMO – is a Dutch development bank that supports sustainable private sector growth in developing countries and emerging markets by investing in ambitious projects and entrepreneurs.
Rabobank – is a Dutch cooperative bank that was founded by farmers in the late 19th century. It has a presence in over 40 countries serving over 8.6 million clients.
Arise’s Investments
Arise provides capital and expertise to the growing financial sector across Sub-Saharan Africa. Arise is directly or indirectly invested in more than 30 countries across sub-Saharan Africa.
Since its inception Arise has made the following investments:
- acquired a 28% shareholding in CAL Bank of Ghana in 2017
- increased its shareholding in DFCU of Uganda to 59% in 2017 in connection with DFCU’s acquisition of Crane Bank
- acquired a 30% stake in Moza Banco of Mozambique in 2018 through a capital raise a a merger with BTM Bank
- acquired a 14% stake in pan-African Ecobank in August 2019
- Providing a USD 7.5 million senior unsecured shareholder loan to Moza Banco in December 2019
Arise Portfolio
Arise today has direct or indirect ownership in 18 top-3 financial institutions in Sub-Saharan Africa and is present in 38 countries.
- CalBank 28% stake
- Moza 30% stake
- bpr 15% stake
- Ecobank 14% stake
- Zanaco 45% stake
- Equity Bank 12% stake
- Socremo 35% stake
- NMB Tanzania 35% stake
- DFCU Bank 59% stake
- NMB Zimbabwe 18% stake
Equity Stake
Arise acquired an 11.99 per cent stake in Equity or 452.5 million shares in 2017. According to a report by Business Daily on Thursday, June 23, 2022, Arise acquired an additional 29 million shares currently worth Ksh1.1 billion in the bank, taking its ownership to 481.5 million shares or 12.76 per cent.
Further reports indicate that Arise bought the additional stake in Equity after selling a minority stake in Rwanda’s Banque Populaire du Rwanda Plc (BPR) to KCB Group.
Arise is also said to have made the additional investment after IFC Financial Institutions Growth Fund acquired a 6.71 per cent stake in Equity Group which was held by Britam Holdings for Ksh13.9 billion.
Ownership Structures
Arise claims board positions in the investees, organises technical assistance programmes, supports investees financially and helps the banks to improve the services they provide to their clients.
The investment company focuses particularly on improving the compliance functions of investee companies and ensuring adherence to the highest environmental, social and governance standards.
“Our goal is to contribute to economic growth in Sub-Saharan Africa and the prosperity of its people. We will achieve this by increasing financial inclusion and employment, strengthening rural development and alleviating poverty,” Arise’s vision statement reads.
