By Mulengera Reporters
A river that forgets its source soon runs dry, but Equity Bank has not forgotten its commitment to Uganda. In a move to fuel economic growth, the financial giant is set to inject a staggering UGX 36 billion ($10 million) into its Ugandan subsidiary.
This investment is part of a broader $30 million capital boost that will also strengthen its Tanzanian operations.
Equity Bank Uganda, having been expanding at a remarkable speed, with its balance sheet growing faster than its profits can sustain, Equity Group Chief Executive Officer, Dr. James Mwangi has recognised this, emphasizing the need for reinforcement to keep the momentum going.
“Uganda is a profitable market, but its rapid growth outpaces the profits’ ability to sustain it. To support this expansion, we are considering an additional capital injection of $10 million,” Dr. Mwangi stated.
This move aligns with the institutio’s strategic vision of empowering businesses and individuals with greater access to credit, allowing Uganda’s economy to thrive. Banks typically need to increase their capital to expand lending capacity while meeting regulatory requirements on asset and liability management.
With this fresh capital, Equity Bank Uganda will enhance its ability to support businesses, entrepreneurs, and large-scale investors.
The bank has over the years solidified its position as one of the pearl’s most dynamic financial institutions. With a keen focus on resilience and innovation, Equity Bank Uganda has played a crucial role in shaping the country’s economic landscape.
Beyond Uganda, Equity Bank’s Tanzanian subsidiary is also set to receive a capital injection of $20 million (Shs73.1 billion). This comes as the subsidiary transitions into a new phase of robust growth after successfully navigating challenges related to non-performing loans.
Known for always taking a long-term view of investment, Equity bank previously injected $10 million into its Tanzania unit and capitalized its Democratic Republic of Congo (DRC) subsidiary with a significant $70 million (UGX 255.9 billion). The DRC operation, which had a balance sheet of $150 million in 2015, has since ballooned to an impressive $5.1 billion (UGX 18.6 trillion).
Rather than seeking external capital in an unfavorable market, Equity Group has opted for internal reinforcements. This strategy has enabled the bank to remain resilient while continuing to empower communities through financial inclusion.
As the bank strengthens its subsidiaries, it remains committed to rewarding its shareholders. The board has approved a conservative dividend payout of UGX 452.3 billion for the year ending December 2024, equivalent to 33% of its net earnings.
With this new capital injection, Equity Bank Uganda is poised to serve its customers even better, ensuring that businesses have the financial muscle to thrive. Indeed, as the saying goes, “a tree with strong roots laughs at storms,” and Equity’s firm financial roots are ensuring Uganda’s economic resilience and prosperity.
Equity Bank remains a symbol of strength and trust in the country’s financial ecosystem. This latest capital injection is not just about numbers, but a clear signal of the institution’s unwavering commitment to growth, stability, and prosperity for all Ugandans. (For comments on this story, get back to us on 0705579994 [WhatsApp line], 0779411734 & 041 4674611 or email us at mulengeranews@gmail.com).
