Equity Bank Kenya Limited Explained

Equity Bank Kenya Limited
Trading Name:Equity Bank
Predecessor:Equity Building Society
Area Served:East Africa
Industry:Banking
Products:Loans, Mortgages Investments, Debit Cards, Credit cards
Revenue:

profit Aftertax: US$308.32 million (KES:33.9 billion) (2021)[1]

Assets:KES 960,938,706 (2024)
Parent:Equity Group Holdings Limited
Hq Location:9th Floor, Equity Centre
Hospital Road, Upper Hill
Location City:Nairobi
Hq Location Country:Kenya

Equity Bank Kenya Limited is a Kenyan bank and financial services provider headquartered in Nairobi providing retail banking and commercial banking services. The bank is licensed as a commercial bank by the Central Bank of Kenya, which is the national banking regulator of Kenya.[2]

In 2010 the bank introduced the Agency banking model,[3] which has proved a success[4] and is regulated by Central Bank of Kenya Prudential guidelines.[5]

History

Equity Bank Kenya Limited was incorporated in 2014, as a result of the corporate restructure of its parent company Equity Group Holdings Limited.[6] Prior to November 2014, Equity Group Holdings Limited operated both as a licensed bank and a holding company for its subsidiaries.

On 31 October 2014, Equity Bank announced its intention to incorporate a new, wholly owned subsidiary Equity Bank Kenya Limited, to which it would transfer its Kenyan banking business, assets and liabilities. By converting Equity Group Holdings Limited into a non-trading holding company (as defined under the Banking Act) that owns both banking and non-banking subsidiary companies and provides strategic, brand, risk and personnel management to its subsidiaries, the group would be better able to invest and develop the businesses.

During an extraordinary shareholders general meeting held on 24 November 2014, it was resolved to restructure the firm, leading to the formation of Equity Bank Kenya Limited.[7]

Equity Bank Kenya won the most Socially Responsible Bank of the Year by the African Banker Awards for the year of 2019 and also Bank of the Year in Kenya award by The Banker for the year 2019.[8]

According to the business daily, the bank rebranded in 2019 in a bid to do business under one brand for the next phase of growth as the bank was marking 35 years.[9] In 2020, Equity Bank acquired Banque Commercial Du Congo (BCDC).[10]

Ownership

The Equity Bank Kenya Limited is wholly owned by the Equity Group Holdings, which has a customer base in excess of 14 million in six East African countries, making it one of the largest commercial banks on the African continent by number of customers.[11]

Branch network

Equity Bank maintains a network of 190 branches across Kenya, which includes 52 branches in Nairobi.[12]

Governance

The eight-member board of directors is chaired by Ambassador Erastus J O Mwencha. Gerald Warui, serves as the managing director of the bank.[13]

Controversies and fraud

Equity Bank has found itself in the midst of controversies, especially cyber fraud associated with its ATM cards, Equitel SIM cards, and Eazzybanking (a mobile banking platform) services that lead to the loss of clients' savings.[14] Although the cases are scattered, they have been relatively consistent recently, prompting the bank to issue statements warning customers about the same and adding more security layers to its services. For instance, the bank introduced a one-time PIN to its mobile banking and internet banking services.[15] [16] [17] It is also suspected that some cases are a result of inside job from unethical employees and agents and that refunds are not guaranteed with some clients reporting threats and intimidation when making followups.[18]

In the past, Equity Bank employees have also been implicated in tax evasion scandals. In 2016, the bank surrendered two of its employees to the KRA for prosecution over their role in facilitating tax evasion, in which Ksh.124 million in import duty was lost.[19]

In January 2021, Equity Bank Congo was embroiled in a controversy with the Congolese Central Bank after its merger with the country’s second-largest bank, Banque Commerciale du Congo (BCDC). In the middle of the controversy was a memo in which James Mwangi unilaterally announced plans to integrate BCDC's operations and data into Equity Group's database, set up an initial management committee, and appoint two managing directors. The Banque Centrale du Congo disapproved of the decisions arguing that the "Legal and regulatory requirements do not allow for two managing directors to oversee one institution" and that Mr. Mwangi had no capacity to make the decisions as he was only a "representative of a shareholder and has not been mandated by the acquiring company to make decisions on its behalf."[20]

In May 2023, a customer sued the lender for an alleged breach of their privacy after the bank shared his information with an unauthorized third party without consent.[21]

In April 2024, reports emerged that a 7-day hackers expedition made away with Ksh 179,677,736 from 551 customers through debit card fraud.[22]

See also

Notes and References

  1. Web site: Audited December 2013 Annual Report. March 2014. 23 November 2014. Equity Bank Group (EBG).
  2. Web site: 23 November 2014 . Central Bank of Kenya: Directory of Commercial Banks And Mortgage Finance Companies . . dead . https://web.archive.org/web/20140701161422/https://centralbank.go.ke/index.php/bank-supervision/commercial-banks-mortgage-finance-institutions . 1 July 2014.
  3. News: New agency banking system deepens access to financial services . Business Daily. 2017-08-23. en-UK.
  4. Web site: Equity Bank 3.0: Agency Banking & Equitel. bankelele.blogspot.co.ke. 2017-08-23.
  5. News: Legislation and Guidelines – CBK. CBK. 2017-08-23. en-US.
  6. Web site: Circular To Shareholders for The Transfer of The Kenyan Banking Business to a Newly Created, Wholly Owned Subsidiary . 31 October 2014 . 23 November 2014 . . dead . https://web.archive.org/web/20141112215815/http://ke.equitybankgroup.com/index.php/files/download/1259 . 12 November 2014.
  7. Web site: 20 September 2018 . 31 October 2014 . Equity Bank restructuring to form new holding company . Margaret . Wahito . . Nairobi.
  8. Web site: Winners Announced for African Banker Awards 2019 Les gagnants pour les Trophées African Banker 2019 . African Business . 1 September 2021 . 13 June 2019.
  9. Web site: Equity rebrands in growth push . 6 September 2021.
  10. Web site: Omondi. Dominic. Equity Bank value crosses Sh1tr after Congo acquisition. 2022-01-20. The Standard. en.
  11. Web site: Kenya's Mobile Innovation Brings Digital Money Closer. Zoe. Flood. BBC News. 3 July 2014. 23 November 2014.
  12. Web site: Equity Bank Branches Equity Bank Branches Kenya Branches Equity Bank Kenya. 2021-05-20. banks-kenya.com.
  13. Web site: Equity Appoints Veteran Insider for Managing Director Position Equity Group Holdings . 6 September 2021 . en.
  14. Web site: The Tale of Fraud Cases at Equity, and What the Bank is Doing About It. Kenn. Abuya. Techweez. 30 September 2020. 27 June 2023.
  15. Web site: Equity Bank Asks Customers To Be Alert As Scammers Run Amork. Alfred. Onyango. The Star Kenya. 9 February 2023. 27 June 2023.
  16. Web site: Relax, We've Dealt With Fraud Cases, Equity Bank Assures. Sharon. Mwende. The Star Kenya. 4 February 2023. 27 June 2023.
  17. Web site: How Latest Eazzy Banking Update Shields Customers From Scammers. Kenn. Abuya. Techweez. 12 August 2020. 27 June 2023.
  18. Web site: Bank customer spends months chasing her defrauded Shs21m. Ismail. Ladu. Daily Monitor. 19 August 2021. 27 June 2023.
  19. Web site: Equity Bank surrenders staff to KRA over fraud. Paul. Wafula. The Standard. 17 March 2016. 27 June 2023.
  20. Web site: DRC’s problems with Kenya’s Equity Bank and James Mwangi. Stanis. Bujakera. Aurélie. M’Bida. The Africa Report. 28 January 2021. 27 June 2023.
  21. Web site: Customer Sues Equity Bank for Data Breach Dispute. Sam. Kiplagat. Business Daily. 15 May 2023. 27 June 2023.
  22. Web site: 17 April 2024 . How hackers stole Sh179 million from Equity Bank in seven days . Kimuyu . Hillary. 17 April 2024. Nairobi News . en-US.