The Helios Shareholder who wants to be allocated their own shares of Equity Bank

Major Highlights on Equity Bank Investor Briefing 16/11/2015

1. Helios Exit

• Helios invested in Equity Bank in 2007 and was confirmed by Dr. Mwangi that they have fully exited the market. The main reason for this was that it was a closed ended fund with a 7 year exit strategy and that time limit had elapsed hence the exit. It was highlighted that they will still engage in joint investments with Helios in the future.
• The group CEO highlighted the top shareholders in Equity are Norfund & Norfin, Genesis, Renaissance, Black Rock, NSSF Uganda and Investec. It was highlighted that one of the shareholders in Helios fund wants to be allocated their own shares in Equity Bank and does not intend to exit.

  

• The CEO commended the seamless exit by Helios and quick uptake by global investors such as Norfund who can guarantee 25 years holding in the market with a long term view.
• The CEO highlighted that the top shareholders have a long term view and have sufficient liquidity, if Equity Bank requires debt financing this can be easily sought from them and would be very strategic going forward.
• NSSF Uganda which made an investment stake larger than Equity’s business in Uganda is a signal of confidence in Equity and they can be engaged in broadening market share in Uganda.
• The CEO highlighted that the major shareholders who took up that 25% stake paid a premium of as much as 10%. The highest paid KES 52 per share for their stake.
• Other bidders who wanted the Helios stake and were unable to get a piece of it was China Construction Bank, Maersk among others.

2. Agency Banking

• The Group CEO highlighted that Equity’s agency banking business has grown massively and on average experiences 300/400 transactions per day. Top agents earn between KES 750 to KES 1 million per month. This has brought more financial inclusivity.
• The agents are trained quarterly. Equity bank has trained 20,000 informal sector players in formalizing their business operations.
• The new Equitel platform is targeting 120 transactions per month and is set to grow over time. The Group CEO mentioned that this platform has led to 1 million people acquiring loans amounting to KES 4 Billion. The platform will make it easier to acquire loans going forward.

3. Interest Rates

• Equity Bank announced withdrawal of a one month notice that it had issued to its customers to increase interest rates on loans effective 19th November 2015. Effectively, Equity Bank Kenya has given its’ customers reprieve of higher loan repayments that would have come with the higher interest rates on loans.

Analysis By @kenyanwallstreet