Banque Commerciale Du Congo (BCDC) made the equivalent of Sh5.6 billion in the form of commissions on transactions including foreign exchange trades in the year ended December 2019, the report by PricewaterhouseCoopers shows.
This accounted for 46.6 percent of the total income of Sh12 billion over the same period. Lending income was second, standing at 4.6 billion and representing 38.3 percent of the total revenue.
Equity Group’s #ticker:EQTY new banking subsidiary in the Democratic Republic Congo (DRC) derives most of its revenue from commissions rather than lending, according to an audit report seen by Business Daily.
Banque Commerciale Du Congo (BCDC) made the equivalent of Sh5.6 billion in the form of commissions on transactions including foreign exchange trades in the year ended December 2019, the report by PricewaterhouseCoopers shows.
This accounted for 46.6 percent of the total income of Sh12 billion over the same period. Lending income was second, standing at 4.6 billion and representing 38.3 percent of the total revenue.
DRC’s economy is highly dollarised, meaning that the greenback is being used alongside the Congolese Franc.
This generates a lot of foreign exchange transactions, resulting in commissions that outpace interest income from lending.
BCDC, whose net profit jumped 21.4 percent to Sh1.2 billion in the review period, keeps millions of dollars in fixed deposit accounts in global banks including Citi New-York and Frankfurt-based Commerzbank.
PwC says the bank is likely to maintain its profitability despite the effects of the Covid-19 pandemic.
“As of this date, the bank’s net income remains in line with expectations,” the accounting firm said in its report dated June 9, 2020. PwC added that the only adverse event was the loss of a major customer who withdrew his deposits to reduce his “assets concentration risk at the bank.”
Despite the upbeat forecast, Equity managed to renegotiate its purchase of the controlling 66.5 percent stake in BCDC from the family of George Arthur Forrest in what saved it Sh1 billion.
The Kenyan banking multinational said the parties revised the buyout price from $105 million (Sh11.3 billion) to $95 million (Sh10.3 billion) after taking into consideration the pandemic which struck midway through the deal.
Equity will have minority shareholders in the subsidiary including the Congolese government with a 25.5 percent stake and other unnamed investors (7.9 percent).
Equity says the transaction is aimed at deepening its regional diversification besides enhancing scale in DRC where it already owns another bank (Equity Bank Congo).
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