Equity Group has discontinued discussions on the proposed transaction to acquire Atlas Mara (ATMA) that would have seen them operate in Rwanda, Tanzania, Zambia and Mozambique.
In a statement, the bank said the Board’s view of uncertainty of risk which precipitated the proposed withdrawal of sh9.5 billion dividend pay-out to shareholders informed the decision.
Speaking on the Board’s decision, Dr. James Mwangi, Managing Director and CEO said the Board has considered the events that have taken place since January this year when the two parties agreed to extend transaction discussions and particularly the impact of the COVID-19 pandemic to the world and the economies in which Equity operates and have mutually agreed to discontinue discussions on the transaction for the foreseeable future.
Dr. Mwangi added, “The Board’s Business Continuity Management is focused on conserving cash and liquidity and deploying it to support our customers to survive during this economic crisis and to recover and thrive post the crisis. A strong capital and liquidity position gives us the strength and capacity to cushion our business, accommodate and walk with our customers during these challenging times. We have deployed a defensive and offensive mechanism through loan accommodations and rescheduling/restructuring of up to 25 per cent of the total loan book for periods of up to 36 months. This will enable our customers to go through the prevailing turbulence, while at the same time preserving cash to shore up the financial revival and growth of their businesses post the COVID-19 crisis.”
The statement said that the Group is focused on accelerating the push to digital channels and growing the various non-funded income franchises while re-evaluating the acquisition of new businesses where significant capital injection and managerial attention is required.
Dr. Mwangi was however unequivocal that the Group is committed to its strategic objective of expanding its footprint in Africa to provide access to competitive, tailored financial services to improve people’s lives and livelihoods whilst also delivering significant value to its stakeholders. “At the same time, the Group continues with its vision of building sub-Saharan Africa’s premier financial institution through delivering innovative products and services to customers including in particular the effective use of technology self-service banking”, he noted.