A Bank on a Mission: How Equity is Shaking Up Uganda’s Banking Industry

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BY Moses Kaketo

Equity, formerly Equity Bank Uganda, has been described by many as the most aggressive and fastest growing commercial bank in Uganda. Last year, Equity’s profit grew by 49% to Ugx. 86bn, up from Ugx. 57.8bn in 2020. making it the 5th most profitable bank with a market share of 8.6%. There are 26 commercial banks in Uganda.

Launched In 2008, the subsidiary of Equity Group Holdings has been on a growth trajectory and currently stands at position 8th in the market by total assets. A recent market study report lists Equity among the top three banks that are set to double shareholder capital in the medium-term with rates of return higher than 100%. With 45 branches and still growing, the bank also has over 5,000 EquiDuuka agents (agent banks), 6,000+ merchants (PoS), 48 ATM’s and over 1.2 million customers—that is Equity for you.

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This has been achieved in a space of about 15 years. There is a very good reason for the big boys to worry. In Kenya , as of 31st December 2021, out of over 40 banks, it was leading in Tier 1, relegating the continental, global banks and those established 100+ years ago.

In Tier 1, banks are considered by the Central Bank of Kenya to be the safest due to their net assets, customer deposits, loans, reserves, and deposit accounts.

Can they do it here? Industry experts agree that if Equity Uganda continues with the current momentum, growth trend, it will be number one in a few years to come.

What’s behind this phenomenal growth?
In recent years, the bank has introduced a number of innovations aimed at delivering excellent services. They have a long-term, clear strategy. They are willing to invest today and reap tomorrow.

Agency Banking: Equity has mastered agency banking more than all the other 25 players. It now has over 5,000 EquiDuuka agents, thanks to the junior staff it hired from MTN and Airtel. They enrolled the staff from the telecoms who were instrumental in rolling out mobile money. Today, Equity has more bank agents than any other commercial bank in Uganda. And the volume of transactions is on the rise. In July and August 2022, the amount of money the bank received through agency banking was more than what the bank got from the physical branches. According to the Uganda Bankers Association‘s latest report, the agency platform transacts an average of Ugx 2.2 trillion per month and has more than 15,000 agents.

The very active group CEO

Those who have worked closely with him describe Equity Group CEO & MD Dr. James Mwangi as ‘‘a very active and nonsense man with zero tolerance for non-performance.’’
“He rewards performance. He will give you all you need to perform. However, any mistake, he will fire you immediately, ”

We understand he singlehandedly head hunted the former Stanbic Bank head of public service, Mrs. Elizabeth Kasedde. She was promoted to director role. We can’t talk about leadership and fail to mention the Equity Bank board headed by Mark Ocitti
Disrupting the industry

The bank has changed the rules of the game. It offers extended working hours, Oasis mall branch, for example, opens up to 9:00pm, while other branches are open on Sundays. Most banks open at 8:30 and close at 4:30, and remain closed on Sunday. The increased working hours at Equity have attracted more business people. “As a businessman, if you ask me which is the best bank to do business with, I will endorse Equity,’’ said a top businessman dealing in fast moving goods. “Equity is an enabler of business,’’ he added.

Customer service
A satisfied customer will not only stay, they will also tell their friends and family. The bank tapped into the services of Joel W. from Airtel Uganda. The seasoned customer service guru has helped turn around the bank’s customer experience. We understand, Equity turnaround time (TAT) today is high. TAT time is a period of time required for completing a particular process or task from the moment it is formally demanded.
What’s more, Equity now organizes regular member meetings with businessmen (Equity prefers to call their customers members) across the country to listen to them and seek views on how best to serve them. One businessman who attends the meetings described the Equity as a ‘’ bank on a mission.’’

also read: Beer wars: How Uganda Breweries outmatched Nile Breweries

Inside the banking hall, smiling and well-informed staff are readily available to help you.
At the group level, Equity hired a Tanzanian national as director of I.T. The former Airtel Uganda employee has transformed the bank’s I.T. He has ensured that Equity’s platforms are working efficiently 24/7. The customers we spoke to while preparing this article did not mention regular cases of downtime with the bank’s platforms.
Account opening services on the phone: In February 2022, Equity Bank Uganda launched account opening services on the phone. The self-service platform enables users to open an account without visiting the bank. Any potential customer can open an Equity account on any phone type at no cost by simply dialing *247# and following the prompts. Customers can also withdraw funds from their accounts using one of the over 5,000 EquiDuukas.

“The operating environment has changed. As a result, customers are increasingly showing a preference for self-service banking, which makes banking something you do, and not somewhere you go. As a result, Equity will continue to innovate and disrupt its offerings to meet the current and future needs of customers. Dr. James Mwangi, CEO and Managing Director of Equity Group, stated.

Focus on the untapped
While some banks are closing branches, Equity is rolling out more branches in remote and strategic areas like Ntungamo, Ishaka, Kiryadongo etc to tap into untapped markets. “Building on our distinctive strengths that have led to our success to date, Equity will follow a tailored entry and growth strategy,’’ Dr. Mwangi once said.

As one marketing guru puts it, ‘’you cannot move faster than the economy. The vast majority of Ugandans are still In an analogy, “aware of this, Equity is taking two approaches: digital front and brick and mortar style, which appears to be working for them.”

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Industry experts agree that Equity’s risk appetite is high. They are willing to lower the guards to attract business. Their model is to pick up anything and, after some time, they will clean up. ‘‘This is a good strategy, out of 100 businesses, you will get 70% good business.” According to an industry expert with over ten years of senior management experience, Newz Post. Meanwhile, some banks are only looking for clean businesses, which is the reason they are struggling years later since they launched in Uganda.

Group strength

The Banker’s Top 1,000 World Banks 2020 ranked Equity Bank 754th in its global ranking; 62nd in terms of Capital Assets to Assets ratio; 55th in terms of Profits on Capital; and 20th in terms of Return on Assets.
Meanwhile, The Banker’s Top 100 African Banks 2020 ranked the bank 7th among the top 10 banks in Africa, 5th for strength, 9th for growth performance, 8th for return on risk, and 6th for profitability and leverage category. That is equity for you.

Bottom line: Equity Uganda has a strong foundation. It can easily borrow from the parent company for growth and expansion. Growth entitles tapping the best talents. For example, Equity Uganda poached two key staff from Standard Chartered Bank Uganda who were handling the Chinese accounts.
China-Africa bilateral trade has been steadily increasing for the past 16 years, reaching $192 billion in 2020.

read: The rise & rise of Stabex International: now occupies No.3 after Shell & TotalEnergies
Decision making at Equity Uganda
Unlike some regional and global banks, Equity Uganda is semi-independence, management can take independent decisions without necessarily having to first seek clearance from Nairobi. the managers are given key result areas ad targets interms of revenue growth, profit margins and volume sales. This semi-independence is replicated at the branch level.

Uganda has been divided into six regions. Each region is under the supervision of a regional manager, who oversees branches within that region. His main role is business development. All the issues that cannot be handled at branch level are forwarded to the regional manager. This kind of structure means limited bureaucracy and quicker decision-making.
In good standing with the Ugandan government and the Ugandan Central Bank
They say if you want to live longer, keep your enemies close.
Equity Uganda follows this principle to the dot. The bank is said to be in good books with the government of Uganda and the regulator, the Bank of Uganda. For example, the bank has had issues here and there, but the regulator has always kept a blind eye and ear.

read: Is the Bank of Uganda in a leadership crisis? No: Governor, quorum for the board

also read: Fraud, insider dealing at Uganda Development Bank: 900m disappears just like that; could this be a tip of the iceberg?

About the author: The writer is a marketing and distribution expert. He sees business in everything. He loves writing business news, reviews, and analyses. Reach him on +256782507579 or Twitter: @mkaketo LinkedIn: Moses Kaketo

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