Kenyan bank to scale down South Sudan operations over uncertainty

Source: Xinhua| 2017-08-22 20:42:51|Editor: ying
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by Ronald Njoroge

NAIROBI, Aug. 22 (Xinhua) -- Regional bank Equity Bank announced on Tuesday that it will scale down its South Sudan operations due to ongoing political uncertainty.

Equity Bank Group CEO James Mwangi told an investor briefing in Nairobi that the organization will reduce its branches in Africa's youngest nation from 13 to five.

"We will remain in South Sudan so long as we are not making losses. Currently we are depending on non-funded revenues to stay afloat," Mwangi said.

Kenyan-based Equity Bank has subsidiaries in Uganda, Tanzania, Rwanda, South Sudan as well as Democratic Republic of Congo.

Mwangi said that in order to deepen its regional presence, it plans to roll out agency bank in all its subsidiaries.

"We have already received regulatory approval from the Central Bank of Uganda, Rwanda, Democratic Republic Congo and Tanzania to carry out agency banking in the respective countries," he added.

According to the financial results for six months ending in June 30, the firm posted 133 million U.S. dollars in pre-tax profit, down from 142 million dollars for a similar period last year.

Mwangi said that decline in profit was due to a decline in interest income which was caused by the interest rate capping law that was operationalized in Kenya in 2016.

Mwangi noted that the subsidiaries outside of Kenya contributed ten percent of the revenues.

"As part of our regional diversification strategy our target is that operations outside Kenya generate 40 percent of all income in the next five years," he added.

The regional bank's deposit mobilization has been boosted by growth in customer numbers which have reached 11.7 million customers up from eight million customers in 2010.