Latest / The Mwango Capital Podcast / Equity Group's Q3 2024

Transcript

Equity Group's Q3 2024 · The Mwango Capital Podcast

• 0:00
  SPEAKER_02: Thank you for joining us this evening on Mwango Spaces,
• 0:02
  SPEAKER_02: where we hold conversations on capital markets,
• 0:04
  SPEAKER_02: especially in East Africa.
• 0:05
  SPEAKER_02: My name is Eric Mukai.
• 0:06
  SPEAKER_02: I'm the founder of Mwango Capital.
• 0:08
  SPEAKER_02: Today, we are focusing on equity group Q3 results and the DRC strategy to help us dissect that.
• 0:14
  SPEAKER_02: We have three able speakers.
• 0:16
  SPEAKER_02: We'll start with Brent.
• 0:16
  SPEAKER_02: Perhaps you could say a little bit about yourself,
• 0:18
  SPEAKER_02: what you do at equity,
• 0:20
  SPEAKER_02: and a little brief on your career so far.
• 0:22
  SPEAKER_02: Great.
• 0:22
  SPEAKER_03: Thank you, Eric, and good day, everyone.
• 0:24
  SPEAKER_03: So my name is Brent Malahy.
• 0:25
  SPEAKER_03: I'm the Chief Strategy Officer at Equity Group.
• 0:28
  SPEAKER_03: I've been with the group for almost nine years,
• 0:30
  SPEAKER_03: and prior to that,
• 0:31
  SPEAKER_03: I've had a sense of experience across financial services,
• 0:34
  SPEAKER_03: working at Standard Bank,
• 0:35
  SPEAKER_03: JP Morgan,
• 0:36
  SPEAKER_03: Fitch Ratings,
• 0:37
  SPEAKER_03: and Investec Asset Management,
• 0:38
  SPEAKER_03: which is now called the 91.
• 0:40
  SPEAKER_03: I'm also a board member on our Equity BCD subsidiary in the DRC,
• 0:45
  SPEAKER_03: as well as our technology business called GRID.
• 0:48
  SPEAKER_03: What brought you to Equity Group, if you may ask?
• 0:50
  SPEAKER_03: I've known Dr. Mwangi prior to joining Equity Bank for a number of years.
• 0:54
  SPEAKER_03: As I mentioned,
• 0:55
  SPEAKER_03: I worked at some financial institutions,
• 0:58
  SPEAKER_03: which I was able to cross paths with Dr.
• 1:00
  SPEAKER_03: Mwangi,
• 1:01
  SPEAKER_03: and we've been engaging continuously,
• 1:03
  SPEAKER_03: whether on
• 1:04
  SPEAKER_03: the business of Equity Bank, banking, telcos.
• 1:07
  SPEAKER_03: And after those many years of interactions with Dr. Mwangi and Equity Bank, I found myself at the bank.
• 1:12
  SPEAKER_02: I'll come back to you, so you can give us a bit of a brief on the strategy.
• 1:15
  SPEAKER_02: I'll allow the other two to introduce themselves.
• 1:17
  SPEAKER_02: I'll start with Willy.
• 1:18
  SPEAKER_02: Maybe you can introduce yourself and say what you do and how you ended up at Equity Group.
• 1:21
  SPEAKER_02: Thank you very much.
• 1:22
  SPEAKER_01: I am the CEO of equity subsidiary in the DRC.
• 1:28
  SPEAKER_01: We go here by EBCDC.
• 1:29
  SPEAKER_01: I've been appointed as a DMD since 10 days,
• 1:32
  SPEAKER_01: but I spent a few months at equity group in Nairobi and acting with senior management.
• 1:38
  SPEAKER_01: Prior to equity,
• 1:39
  SPEAKER_01: I was with Citibank in the DRC where I was sitting there as the MD of the
• 1:46
  SPEAKER_01: subsidiary in the DRC for the last seven years.
• 1:48
  SPEAKER_01: Before the seven years, I was the deputy director.
• 1:51
  SPEAKER_01: MD,
• 1:51
  SPEAKER_01: and then prior to the deputy MD role,
• 1:54
  SPEAKER_01: I was the country treasurer combined with the global markets activities,
• 1:58
  SPEAKER_01: both on fixed income and then on foreign exchange.
• 2:02
  SPEAKER_01: 17 years spent with Citi, but I did also spend time in various roles in financial services in the U.S.
• 2:08
  SPEAKER_01: So why did I join Equity?
• 2:10
  SPEAKER_01: But I'm from the DRC.
• 2:12
  SPEAKER_01: I have a lot of passion for my country, which I think is one of the countries where the natural resources
• 2:19
  SPEAKER_01: Being so massive,
• 2:20
  SPEAKER_01: but at the same time,
• 2:21
  SPEAKER_01: the impact on the living conditions on the DRC population remains quite insignificant.
• 2:25
  SPEAKER_01: And I believe the equity, that proposition to address the critical needs of the DRC people.
• 2:32
  SPEAKER_01: And this is the main reason why throughout my discussions with the group,
• 2:35
  SPEAKER_01: including a group CEO,
• 2:36
  SPEAKER_01: James Swange,
• 2:37
  SPEAKER_01: that I made that call to join this red institution.
• 2:40
  SPEAKER_01: So I can also add my skills, competencies to impact my own people.
• 2:44
  SPEAKER_01: Thank you.
• 2:44
  SPEAKER_02: Thank you really for sharing that.
• 2:46
  SPEAKER_02: Patti, over to you now.
• 2:47
  SPEAKER_02: You can introduce yourself and you can tell us a bit about your journey that led you to Equity Group.
• 2:51
  SPEAKER_02: Thank you very much.
• 2:52
  SPEAKER_00: My name is Patti Chagalusa.
• 2:54
  SPEAKER_00: Yes,
• 2:54
  SPEAKER_00: with my 16 years of experience in the banking,
• 2:58
  SPEAKER_00: after several years as a branch manager in several provinces in this country,
• 3:03
  SPEAKER_00: I worked in Kassai,
• 3:05
  SPEAKER_00: the central provinces.
• 3:07
  SPEAKER_00: And I managed also the Eastern region for 10 years in BCDC,
• 3:13
  SPEAKER_00: the Eastern region with more than seven provinces as commercial direct of the
• 3:17
  SPEAKER_00: region before returning to Kinshasa,
• 3:20
  SPEAKER_00: the headquarter of the bank to manage the business segment.
• 3:23
  SPEAKER_00: And as the story after the merger,
• 3:25
  SPEAKER_00: I was first managing MSME's banking and the business banking in the equity business
• 3:32
  SPEAKER_00: here in Kinshasa.
• 3:33
  SPEAKER_00: And now I'm in charge of commercial projects
• 3:36
  SPEAKER_00: in the Democratic Refabric of Congo,
• 3:39
  SPEAKER_00: which the main mission of the department is to ensure the execution of the bank
• 3:44
  SPEAKER_00: general strategy,
• 3:46
  SPEAKER_00: which the main relates to the African recovery and resilience that you know very well.
• 3:51
  SPEAKER_00: I think we manage the implementation of this strategy.
• 3:54
  SPEAKER_00: with a particular focus on the pillar three related to trade and investments.
• 3:59
  SPEAKER_00: We also take care of the development of the bank and the network of branches across
• 4:05
  SPEAKER_00: the country in accordance with our strategy to establish five regions by the bank.
• 4:09
  SPEAKER_00: We also ensure that our whole project
• 4:13
  SPEAKER_00: In different segments of the bank,
• 4:15
  SPEAKER_00: which the public sector incorporates,
• 4:17
  SPEAKER_00: MSAB and retail are well carried out for the satisfaction of our partners and customers.
• 4:23
  SPEAKER_00: And we also act as a bridge between the foundation in PRC,
• 4:27
  SPEAKER_00: which was the social investment and the bank's economic engine.
• 4:31
  SPEAKER_00: I think I will stop by there for now.
• 4:33
  SPEAKER_00: Thank you very much.
• 4:34
  SPEAKER_02: Thank you, Prati.
• 4:34
  SPEAKER_02: I'll come back to Branch now.
• 4:36
  SPEAKER_02: Branch,
• 4:36
  SPEAKER_02: maybe you're going to give us a bad overview of equity group and the various kind
• 4:41
  SPEAKER_02: of segments that the group deals in.
• 4:43
  SPEAKER_02: And you can just give us a brief overview of the company and how it is and how DRC
• 4:48
  SPEAKER_02: fits into all that as the group strategy officer.
• 4:50
  SPEAKER_03: Thank you, Eric.
• 4:51
  SPEAKER_03: So Equity Group is essentially an integrated financial services group.
• 4:55
  SPEAKER_03: We have four key verticals in the group.
• 4:58
  SPEAKER_03: The first one is what we're historically known for around our banking vertical.
• 5:02
  SPEAKER_03: And here we operate across six markets,
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  SPEAKER_03: essentially in East African community,
• 5:07
  SPEAKER_03: with the exception of Burundi and more recently Somalia that joined the EIC.
• 5:11
  SPEAKER_03: Our second pillar is around insurance.
• 5:13
  SPEAKER_03: Here,
• 5:13
  SPEAKER_03: over the last three years,
• 5:14
  SPEAKER_03: we entered as part of our diversification into different verticals into the
• 5:18
  SPEAKER_03: insurance space.
• 5:19
  SPEAKER_03: And here we operate for the last three years in the life business in Kenya.
• 5:23
  SPEAKER_03: And we will look to expand these licenses into property and casualty, as well as in-house.
• 5:29
  SPEAKER_03: And essentially,
• 5:30
  SPEAKER_03: wherever our banking business is,
• 5:31
  SPEAKER_03: which is essentially a lead for us into markets,
• 5:34
  SPEAKER_03: our insurance business will follow as well.
• 5:36
  SPEAKER_03: Our third vertical is our technology business headed by our offensive company.
• 5:41
  SPEAKER_03: Here,
• 5:42
  SPEAKER_03: it's essentially a mobile-led capability around payment and basically providing our
• 5:47
  SPEAKER_03: services through the mobile channel across bank insurance.
• 5:50
  SPEAKER_03: And then our fourth vertical, and maybe just to highlight...
• 5:53
  SPEAKER_03: The bank, the insurance and the technology verticals we call our economic engine.
• 5:59
  SPEAKER_03: It's your typical commercial activities.
• 6:01
  SPEAKER_03: And then we have a second engine, which is essentially our equity group foundation.
• 6:06
  SPEAKER_03: This is not your typical CSR.
• 6:08
  SPEAKER_03: This is essentially a capacity building community supporting capability of the group.
• 6:14
  SPEAKER_03: And it interacts and capitalizes clients that we are looking to move into our
• 6:19
  SPEAKER_03: economic engine,
• 6:20
  SPEAKER_03: which,
• 6:20
  SPEAKER_03: as I mentioned,
• 6:21
  SPEAKER_03: comprise bank insurance and our technology business.
• 6:23
  SPEAKER_03: So it's essentially the social engine through the foundation is a catalytic capability.
• 6:29
  SPEAKER_03: And given the context where we operate across Eastern Central Africa,
• 6:32
  SPEAKER_03: this capacity building is very important to ensure we build a customer base going
• 6:37
  SPEAKER_03: into the future,
• 6:38
  SPEAKER_03: but also to ensure that our members are knowledgeable of the products that we are
• 6:43
  SPEAKER_03: looking to avail to them.
• 6:45
  SPEAKER_03: And then more recently, we introduced or we brought out what we call the sustainability engine.
• 6:51
  SPEAKER_03: Again,
• 6:51
  SPEAKER_03: in the context where we operate in Eastern Central Africa and in Africa in general,
• 6:55
  SPEAKER_03: climate change does have a significant impact,
• 6:57
  SPEAKER_03: particularly in the majority of livelihoods of food and agriculture.
• 7:00
  SPEAKER_03: So this is a key part of ensuring we have sustainable households and value chains.
• 7:06
  SPEAKER_03: So these four verticals,
• 7:08
  SPEAKER_03: which essentially together with the sustainability engine,
• 7:11
  SPEAKER_03: our business model,
• 7:12
  SPEAKER_03: we believe is quite unique and differentiated.
• 7:14
  SPEAKER_03: And with this business model, my colleague Patty mentioned the Africa Recovery and Resilience Plan.
• 7:20
  SPEAKER_03: And maybe before I go into the strategic plan of Equity Group,
• 7:23
  SPEAKER_03: it's maybe key to highlight that our business model of the three engine model of
• 7:28
  SPEAKER_03: ours is somewhat differentiated.
• 7:30
  SPEAKER_03: And we believe we are somewhat repurposing the role of private enterprise.
• 7:34
  SPEAKER_03: We,
• 7:35
  SPEAKER_03: at least in the context of Africa,
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  SPEAKER_03: private enterprise should have a developmental catalytic role in the economy.
• 7:41
  SPEAKER_03: So with this business model,
• 7:42
  SPEAKER_03: this capability,
• 7:43
  SPEAKER_03: we've essentially put in place a corporate strategy that is essentially a
• 7:47
  SPEAKER_03: developmental plan,
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  SPEAKER_03: which we call the Africa Recovery and Resilience Plan.
• 7:52
  SPEAKER_03: This plan is essentially a social and economic transformation plan.
• 7:56
  SPEAKER_03: It's not your typical corporate strategy where it's to the privy of Witi Bank here.
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  SPEAKER_03: We've actually published our corporate strategy on our website and it's for the public to view.
• 8:06
  SPEAKER_03: And the essence of this Marshall Plan of ours is essentially to develop value chains in Africa.
• 8:11
  SPEAKER_03: And let me give you four statistics,
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  SPEAKER_03: which maybe gives you a sense of the true problem statement of Africa.
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  SPEAKER_03: The first statistic I'll give you is 3%.
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  SPEAKER_03: 3% is the share of wealth that Africa has if you use GDP.
• 8:26
  SPEAKER_03: The second statistic is 8%.
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  SPEAKER_03: And this is essentially the supply of food net of exports that Africa has.
• 8:33
  SPEAKER_03: And then importantly, the third statistic is 17%.
• 8:36
  SPEAKER_03: And this is the share of Africa's population.
• 8:39
  SPEAKER_03: And the last or the fourth statistic I'll give is 25%.
• 8:42
  SPEAKER_03: And this is the population of Africa by 2050.
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  SPEAKER_03: So the real problem statement for Africa is how we close the gap of the 3% to the 25% by 2050.
• 8:51
  SPEAKER_03: And in our plan,
• 8:52
  SPEAKER_03: we're looking to contribute towards this with the initial phase of our plan having
• 8:55
  SPEAKER_03: targets of 2030 in terms of timelines.
• 8:59
  SPEAKER_03: And this plan is essentially looking to close that gap of Africa's wealth of 3% to its population of 25%.
• 9:07
  SPEAKER_03: That is going to be there by 2050.
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  SPEAKER_03: And we're going to do this by essentially connecting,
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  SPEAKER_03: developing,
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  SPEAKER_03: catalyzing,
• 9:14
  SPEAKER_03: improving productivity and driving higher value adding businesses in what is
• 9:19
  SPEAKER_03: currently fragmented African value chains.
• 9:21
  SPEAKER_03: And so on our website, you'll see this framework of ours, this plan of ours to essentially do this.
• 9:26
  SPEAKER_03: So with this strategic context in mind,
• 9:28
  SPEAKER_03: we did report 13% growths in our earnings to around 41 billion shillings for the
• 9:35
  SPEAKER_03: nine months to September.
• 9:37
  SPEAKER_03: Our loan growth was somewhat constrained because of the reporting currencies,
• 9:41
  SPEAKER_03: which resulted in it contracting minus 5%.
• 9:44
  SPEAKER_03: But if you keep the shilling,
• 9:45
  SPEAKER_03: because we report in shillings and the Kenyan shilling did appreciate,
• 9:48
  SPEAKER_03: our loan book did grow at around 4%.
• 9:52
  SPEAKER_03: And we're guiding for the full year to be 2% to 5%.
• 9:55
  SPEAKER_03: So for us,
• 9:56
  SPEAKER_03: in these results of 13%,
• 9:58
  SPEAKER_03: I think it's just one data point of what is the story behind our numbers of this
• 10:03
  SPEAKER_03: Marshall Plan.
• 10:04
  SPEAKER_02: Perhaps you could get a bit of a brief on the performance of the DRC component in the group as a whole.
• 10:11
  SPEAKER_02: And then that would give us a bit of a segue to go to William Patti to discuss a
• 10:14
  SPEAKER_02: little bit of how DRC is a sub-market.
• 10:17
  SPEAKER_03: Our subsidiaries, which include DRC contributors,
• 10:20
  SPEAKER_03: 48% to our asset base.
• 10:22
  SPEAKER_03: DRC contributed a third to the total group in terms of total assets or balance sheet.
• 10:28
  SPEAKER_03: In terms of profit before tax, our subsidiaries contributed 53%.
• 10:32
  SPEAKER_03: And if we just look at the DRC, it contributed also about a third to the group's profitability.
• 10:38
  SPEAKER_03: So we have a diversification initiative, both geographically and hence wide.
• 10:45
  SPEAKER_03: recent upscaling of our Rwanda business.
• 10:48
  SPEAKER_03: This is a part of our geographic diversification initiative,
• 10:51
  SPEAKER_03: but also from a business vertical perspective in terms of the product capabilities
• 10:56
  SPEAKER_03: we have.
• 10:56
  SPEAKER_03: We also diversified the group into insurance as well.
• 10:59
  SPEAKER_03: And as I mentioned, the bank is a lead generator for the rest of the verticals.
• 11:05
  SPEAKER_03: You'll find equity insurance in the DRC as well, as well as what we're doing on the technology side.
• 11:11
  SPEAKER_03: That will maybe give the context of the DRC and there is potential for the DRC and
• 11:16
  SPEAKER_03: there's a likelihood that the DRC will be our largest subsidiary given the growth
• 11:21
  SPEAKER_03: that it's experiencing both at the country level but also reflected in our
• 11:25
  SPEAKER_03: subsidiary level.
• 11:26
  SPEAKER_03: The DRC has the potential to be our largest subsidiary in the next 12 to 18 months
• 11:31
  SPEAKER_03: and we remain very positive in the near term but more importantly over the medium
• 11:35
  SPEAKER_03: to long term to the extent that we are doing a lot of trade missions as Patty
• 11:39
  SPEAKER_03: alluded to.
• 11:40
  SPEAKER_03: We're doing a lot of trade mission into the DRC for many of our markets where we
• 11:45
  SPEAKER_03: operate in,
• 11:45
  SPEAKER_03: but also importantly,
• 11:46
  SPEAKER_03: because of this Marshall Plan we have,
• 11:48
  SPEAKER_03: and given the global reach and connectivity Equity Group has,
• 11:52
  SPEAKER_03: we are bringing international investors outside of the continent into the region
• 11:56
  SPEAKER_03: and into the DRC.
• 11:57
  SPEAKER_03: So that's maybe to give you and the listeners some context to the DRC.
• 12:01
  SPEAKER_02: I could double click on that a little bit.
• 12:03
  SPEAKER_02: What do you see in the DRC as a group?
• 12:05
  SPEAKER_02: It's already a significant part of the balance sheet and going forward,
• 12:08
  SPEAKER_02: it's going to contribute a lot towards the group profitability and all.
• 12:11
  SPEAKER_02: But as a group, what made you think of the DRC?
• 12:14
  SPEAKER_03: So you get a sense of a lot of statistics.
• 12:16
  SPEAKER_03: So let me give you some in our region and you'd say in the corridors where we
• 12:21
  SPEAKER_03: operate and where we neighbor.
• 12:22
  SPEAKER_03: And let me call that corridor everything from the East African community, which includes the DRC.
• 12:29
  SPEAKER_03: Ethiopia,
• 12:30
  SPEAKER_03: and you can put in the south,
• 12:31
  SPEAKER_03: Mozambique,
• 12:32
  SPEAKER_03: Zambia,
• 12:33
  SPEAKER_03: Angola,
• 12:33
  SPEAKER_03: in that,
• 12:34
  SPEAKER_03: call it corridor,
• 12:35
  SPEAKER_03: and you can maybe put in from an agricultural perspective,
• 12:37
  SPEAKER_03: Sudan as well.
• 12:38
  SPEAKER_03: You have essentially 40% of the world's lives arable land.
• 12:42
  SPEAKER_03: So there's a big opportunity, significant opportunity in terms of agriculture and food security.
• 12:47
  SPEAKER_03: Also importantly is the critical minerals,
• 12:49
  SPEAKER_03: whether you're looking at DRC with around 70% of the world's cobalt reserves,
• 12:54
  SPEAKER_03: significant reserves in copper in terms of their high-grade ores,
• 12:57
  SPEAKER_03: as well as in lithium,
• 12:58
  SPEAKER_03: and then you've got Tanzania,
• 13:00
  SPEAKER_03: you've got Zambia,
• 13:01
  SPEAKER_03: Zimbabwe for the south.
• 13:02
  SPEAKER_03: You've got pretty much six to seven of the critical minerals for the energy
• 13:06
  SPEAKER_03: transition and for new technologies.
• 13:09
  SPEAKER_03: So you've got agriculture, you've got critical minerals, and then also importantly, by 2050,
• 13:16
  SPEAKER_03: 10% of the world's population and therefore labor market will be in this corridor
• 13:20
  SPEAKER_03: and consequentially the future consumer market.
• 13:23
  SPEAKER_03: So this corridor, we believe, will be one of the most sought-after corridors or regions in the world.
• 13:29
  SPEAKER_03: You also have in that corridor three to four of the top 10 world's fastest growing economies as well.
• 13:36
  SPEAKER_03: The DRC is at the heart of this.
• 13:38
  SPEAKER_03: And it has significant opportunities in agriculture,
• 13:42
  SPEAKER_03: in mining,
• 13:43
  SPEAKER_03: and it has about 100,000 megawatts of hydro potential.
• 13:47
  SPEAKER_03: It has the world's second largest carbon sink in terms of the Congo Basin.
• 13:51
  SPEAKER_03: So the DRC and this corridor, we believe the world will look to connect down the road.
• 13:57
  SPEAKER_03: And our activity,
• 13:58
  SPEAKER_03: our Marshall Plan,
• 13:59
  SPEAKER_03: our Africa Recovering Resilience Plan,
• 14:01
  SPEAKER_03: positions equity group at the heart of this corridor.
• 14:04
  SPEAKER_03: Thank you, Eric.
• 14:05
  SPEAKER_03: Thank you, Brent.
• 14:05
  SPEAKER_02: I'll quickly move to Willy.
• 14:07
  SPEAKER_02: Maybe, Willy, you can give us an introduction 101 to DRC for those who are new.
• 14:12
  SPEAKER_02: Apart from the size, what else is in the country?
• 14:15
  SPEAKER_01: This is an interesting question for which I think we can take a long hour just to get the good picture.
• 14:21
  SPEAKER_01: from where we sit in the DRC.
• 14:23
  SPEAKER_01: Maybe not to repeat what my colleague Rens clearly explained,
• 14:26
  SPEAKER_01: but again,
• 14:27
  SPEAKER_01: DRC sits in the middle of Africa with nine neighbors.
• 14:31
  SPEAKER_01: I think if you look at the map, you can clearly identify who they are.
• 14:34
  SPEAKER_01: And then we pretty much learn which is locked because the access to the Atlantic Ocean
• 14:38
  SPEAKER_01: I think it's only 27 kilometers,
• 14:41
  SPEAKER_01: which can present challenges in terms of trade between Africa and the DRC and the
• 14:46
  SPEAKER_01: rest of the globe.
• 14:47
  SPEAKER_01: And a guessing point,
• 14:48
  SPEAKER_01: as Brent mentioned,
• 14:49
  SPEAKER_01: I think it's good to really dimension the size of the country in terms of auto
• 14:53
  SPEAKER_01: markets to really step into multiple opportunities.
• 14:56
  SPEAKER_01: As we know, natural resources, I think, in the DRC is one of the highest potentials.
• 15:01
  SPEAKER_01: across the globe.
• 15:02
  SPEAKER_01: And then another fact is the growing population, which is quite young.
• 15:05
  SPEAKER_01: Today,
• 15:06
  SPEAKER_01: we're talking 110 million people living in the DRC,
• 15:10
  SPEAKER_01: scattered around major cities,
• 15:12
  SPEAKER_01: somewhere between 7 and 10 major cities with a high concentration in Kinshasa,
• 15:16
  SPEAKER_01: which is the capital,
• 15:17
  SPEAKER_01: Cap City,
• 15:18
  SPEAKER_01: around 17 million people.
• 15:19
  SPEAKER_01: or here.
• 15:20
  SPEAKER_01: As we go to the other regions,
• 15:21
  SPEAKER_01: particularly in the mining,
• 15:23
  SPEAKER_01: you will find quite a concentration of population around 10,
• 15:27
  SPEAKER_01: 15 million people.
• 15:28
  SPEAKER_01: And moving to this, you will come across the same number.
• 15:31
  SPEAKER_01: What else?
• 15:32
  SPEAKER_01: DRC is soil and land, I think, from that perspective.
• 15:37
  SPEAKER_01: Agriculture is one of the sectors that can drive growth with an impact on the people.
• 15:42
  SPEAKER_01: And then alongside,
• 15:43
  SPEAKER_01: also went south,
• 15:44
  SPEAKER_01: the Congo River,
• 15:45
  SPEAKER_01: which really much crosses the DRC from southeast through the north down to the west
• 15:51
  SPEAKER_01: and then to the ocean Atlantic.
• 15:53
  SPEAKER_01: About 80% of the trajectory of the Congo River can really be used as a highway to
• 15:58
  SPEAKER_01: transport goods and products going from Katanga region,
• 16:00
  SPEAKER_01: mining hub.
• 16:01
  SPEAKER_01: all the way through the Congo down to Kinshasa with connection via the national
• 16:06
  SPEAKER_01: road from Kinshasa to Banana.
• 16:08
  SPEAKER_01: So where there is currently an initiative to build a deep sea approach,
• 16:13
  SPEAKER_01: so merchandise can be shipped in and out of the DRC.
• 16:16
  SPEAKER_01: On another angle, the DRC remains quite undersaved in terms of infrastructure.
• 16:21
  SPEAKER_01: I think that one is known, but as well as financial inclusion.
• 16:24
  SPEAKER_01: Out of the 100 million people, if I have to only take 50%, which could be age,
• 16:29
  SPEAKER_01: Above 18, only 7% of that portion has access to basic financial services.
• 16:35
  SPEAKER_01: So banking industry remains quite embryonic given also the history and similar
• 16:40
  SPEAKER_01: stability going from the late 80s going to the 90s where stability really disrupted
• 16:45
  SPEAKER_01: the whole country and then had negative hits.
• 16:49
  SPEAKER_01: on the economy, and alongside, I think, the private sector pretty much collapsed the banking industry.
• 16:54
  SPEAKER_01: So we've observed a shift in that victory over the last 25 years with the support
• 16:59
  SPEAKER_01: of the international community,
• 17:01
  SPEAKER_01: first from stability in terms of peace,
• 17:03
  SPEAKER_01: in terms of getting to unite the country.
• 17:06
  SPEAKER_01: The country, because of political turmoil, was divided into two or three regions.
• 17:10
  SPEAKER_01: And then it took significant effort from the international community alongside the
• 17:13
  SPEAKER_01: BRC to stabilize and unify the country.
• 17:16
  SPEAKER_01: And then from the early 2000s to maybe today,
• 17:20
  SPEAKER_01: We observed sustainable growth across other industries, also the banking sector.
• 17:24
  SPEAKER_01: If I recall in 2001 or 2002, so the total asset for the banking sector was less than $500 million.
• 17:33
  SPEAKER_01: So just imagine for such a big country,
• 17:35
  SPEAKER_01: for such a big place,
• 17:36
  SPEAKER_01: so only $500 million accounted for a formal banking industry.
• 17:40
  SPEAKER_01: But looking at today,
• 17:41
  SPEAKER_01: if you check the metrics,
• 17:43
  SPEAKER_01: we are getting closer to $20 billion in terms of total banking assets.
• 17:47
  SPEAKER_01: So both in terms of total equity, for which most players believe in the opportunities in this country.
• 17:52
  SPEAKER_01: So we've seen also a deep increase in terms of the project, in terms of funds.
• 17:57
  SPEAKER_01: Inasmuch as it's still quite insignificant,
• 17:59
  SPEAKER_01: but we've seen a surge in activities,
• 18:02
  SPEAKER_01: led the banking industry into the private sector and public sector.
• 18:05
  SPEAKER_01: And I believe we can also mention the efforts made not only on bilateral basis,
• 18:11
  SPEAKER_01: but as well as on multilaterals,
• 18:13
  SPEAKER_01: where the IMF and the World Bank,
• 18:15
  SPEAKER_01: FDB,
• 18:16
  SPEAKER_01: And also in the EU side,
• 18:18
  SPEAKER_01: so other multilateral institutions really come to work along the DRC government to
• 18:23
  SPEAKER_01: sustain that growth.
• 18:24
  SPEAKER_01: So in the last three to four years, the IMF managed to disperse $1.5 billion to really help the DRC
• 18:31
  SPEAKER_01: reach equilibrium on most of the key metrics in terms of inflation,
• 18:35
  SPEAKER_01: in terms of GDP,
• 18:36
  SPEAKER_01: in terms of interest rate,
• 18:37
  SPEAKER_01: and so on.
• 18:37
  SPEAKER_01: Then they successfully completed that program,
• 18:39
  SPEAKER_01: I think,
• 18:40
  SPEAKER_01: early this year,
• 18:41
  SPEAKER_01: which led to the new agreement,
• 18:42
  SPEAKER_01: which was signed,
• 18:43
  SPEAKER_01: I believe,
• 18:43
  SPEAKER_01: last week,
• 18:44
  SPEAKER_01: where they will continue to partner with the IMF for another trench in terms of
• 18:48
  SPEAKER_01: support for $1.5 billion and so on.
• 18:51
  SPEAKER_01: So all in all, I think this is what I can say about the DRC.
• 18:53
  SPEAKER_01: We play quite a significant role as an institution.
• 18:56
  SPEAKER_01: QTBC here is a systemic bank.
• 18:59
  SPEAKER_01: We have within the shareholding structure,
• 19:01
  SPEAKER_01: the government is a shareholder,
• 19:03
  SPEAKER_01: accounting for 2.5% shareholder.
• 19:05
  SPEAKER_01: We believe the DRC government being a shareholder is an opportunity to enter in a
• 19:10
  SPEAKER_01: strong partnership so we can work together and create and address the challenges
• 19:14
  SPEAKER_01: and opportunities to really impact the people here through infrastructure,
• 19:19
  SPEAKER_01: education,
• 19:19
  SPEAKER_01: and health.
• 19:20
  SPEAKER_01: So let me leave it there.
• 19:21
  SPEAKER_01: And then if there was any other question, I'm happy to take it.
• 19:24
  SPEAKER_02: Thanks, Willy.
• 19:24
  SPEAKER_02: Patti,
• 19:25
  SPEAKER_02: maybe you could give us a bit of the strategy that Equity Group is employing in DRC
• 19:30
  SPEAKER_02: to be able to win the market and to win more market share there.
• 19:32
  SPEAKER_02: As commercial director,
• 19:33
  SPEAKER_02: you can also tell us a bit of some of the experiences that Equity Group is having
• 19:37
  SPEAKER_02: on the ground in terms of reception,
• 19:39
  SPEAKER_02: in terms of customers in DRC now.
• 19:41
  SPEAKER_02: How's the experience been so far?
• 19:42
  SPEAKER_00: Yeah,
• 19:43
  SPEAKER_00: our experience,
• 19:43
  SPEAKER_00: as my colleague Brent presented,
• 19:45
  SPEAKER_00: all the strategy of the bank is around our implementation of the ARP.
• 19:50
  SPEAKER_00: But as he said, the bank is using ecosystem strategy, which linked all the different segments.
• 19:56
  SPEAKER_00: We go from...
• 19:59
  SPEAKER_00: side,
• 19:59
  SPEAKER_00: the public sector and the corporate banking,
• 20:01
  SPEAKER_00: where we have the biggest companies and we create the link between all the
• 20:06
  SPEAKER_00: different segments.
• 20:08
  SPEAKER_00: So from the corporate side, we go through the MSMEs up to our consumer.
• 20:13
  SPEAKER_00: And as I told you, for instance, we are doing a lot of trade mission in DRC.
• 20:19
  SPEAKER_00: And for instance, now I'm in Lubumbashi leading trade mission here, which started in Kinshasa.
• 20:26
  SPEAKER_00: And I can just share with you one example of what we are doing in this initiative with the bank.
• 20:32
  SPEAKER_00: These trade missions serve as platform connecting international lock stakeholders,
• 20:38
  SPEAKER_00: enable them to gain firsthand insight into the DRC potential across various sectors
• 20:45
  SPEAKER_00: by facilitating direct engagement,
• 20:49
  SPEAKER_00: site visits,
• 20:51
  SPEAKER_00: discussion about business and with key players in the regions.
• 20:55
  SPEAKER_00: We aim to build the confidence and the force partnership that can drive sustainable investment.
• 21:01
  SPEAKER_00: Just to give an example,
• 21:02
  SPEAKER_00: yesterday we were discussing with two key partners from Tanzania and DRC,
• 21:08
  SPEAKER_00: and we had one long-term sheet which was signed as a NMOU to
• 21:14
  SPEAKER_00: Implement 100 authors of mails in DRC from that partnership which has made yesterday.
• 21:22
  SPEAKER_00: So that is what I can say,
• 21:24
  SPEAKER_00: but I think the role plan of our strategy is just to serve our customer and to be
• 21:29
  SPEAKER_00: sure that they get satisfaction of all our service.
• 21:32
  SPEAKER_00: Thank you.
• 21:33
  SPEAKER_02: Thank you, Pati.
• 21:33
  SPEAKER_02: So I'll come back to Brent.
• 21:35
  SPEAKER_02: I think people are a little worried about the Canadian economy and how it's progressing.
• 21:38
  SPEAKER_02: You can give us a bit of flavor in terms of doing business in Kenya and across East Africa.
• 21:42
  SPEAKER_02: How do you compare that in terms of the economic activities as presently is and how
• 21:47
  SPEAKER_02: the people across the economy are feeling?
• 21:49
  SPEAKER_02: Because you are a behemoth across the region,
• 21:51
  SPEAKER_02: so you should have a finger on the parts of the consumer and how they are feeling
• 21:54
  SPEAKER_02: across the region.
• 21:55
  SPEAKER_03: Great.
• 21:55
  SPEAKER_03: Thanks, Eric.
• 21:55
  SPEAKER_03: So to contextualize, Kenya is around 52% of our balance sheet and around 47% of our profits before tax.
• 22:04
  SPEAKER_03: Let's go on history.
• 22:05
  SPEAKER_03: So the last 20 years to 2018 about Kenya,
• 22:10
  SPEAKER_03: the gross levers were essentially infrastructure-led and public sector funded.
• 22:15
  SPEAKER_03: And what we've been going through over the last few years,
• 22:18
  SPEAKER_03: and we continue to transition into this new phase,
• 22:21
  SPEAKER_03: and it has been somewhat decolored because of
• 22:24
  SPEAKER_03: global inflationary pressures and subsequently high interest rates.
• 22:27
  SPEAKER_03: There was COVID.
• 22:28
  SPEAKER_03: Kenya has been transiting towards a more consumption-led growth where private
• 22:33
  SPEAKER_03: sector will be a big lever and it won't necessarily be fiscal driven,
• 22:39
  SPEAKER_03: but more monetary in terms of policy with fiscal reforms is probably,
• 22:44
  SPEAKER_03: as you've seen,
• 22:45
  SPEAKER_03: the more topical discussions of the last few years.
• 22:49
  SPEAKER_03: There was also the drought of
• 22:51
  SPEAKER_03: 18, 24 months ago that also further exacerbated the challenges that Kenya is currently experiencing.
• 22:57
  SPEAKER_03: And because of these, we find ourselves the economy chugging along at just about 5%.
• 23:03
  SPEAKER_03: It's no meager gross, but this is an economy that should be growing at least
• 23:09
  SPEAKER_03: It's in a half to 7%,
• 23:10
  SPEAKER_03: but because of these cyclical challenges,
• 23:12
  SPEAKER_03: there's obviously an element of contractionary fiscal policy.
• 23:15
  SPEAKER_03: There's very little stimulus in the economy at the moment,
• 23:18
  SPEAKER_03: but more recently with the central bank cutting interest rates,
• 23:21
  SPEAKER_03: equity bank leading the reduction in lending rates for the second time.
• 23:25
  SPEAKER_03: We see the economy stabilizing,
• 23:27
  SPEAKER_03: but pretty much at the bottom,
• 23:28
  SPEAKER_03: and we're starting to see some early signs of stabilization.
• 23:33
  SPEAKER_03: And as we go into quarter one,
• 23:34
  SPEAKER_03: quarter two next year,
• 23:35
  SPEAKER_03: we expect that the stabilization should start converting into recovery.
• 23:41
  SPEAKER_03: So we've seen of the last year or two, essentially consumer disposable income coming under pressure.
• 23:48
  SPEAKER_03: If you look at the food trend,
• 23:51
  SPEAKER_03: The consumption trends in terms of food,
• 23:53
  SPEAKER_03: people have been downgrading from beef to poultry and even from poultry to eggs.
• 23:59
  SPEAKER_03: So that'll give you a sense of the pressures on disposable income.
• 24:01
  SPEAKER_03: You can also see it in the sales of Boda Boda's as well as the downscaling when it
• 24:06
  SPEAKER_03: comes to the beverages as well.
• 24:09
  SPEAKER_03: Those challenges are still there.
• 24:11
  SPEAKER_03: The sales of our clients in cyclical industries are still under pressure,
• 24:16
  SPEAKER_03: but they're starting to stabilize at these low levels and we expect them to start
• 24:20
  SPEAKER_03: recovering as we go into quarter one,
• 24:23
  SPEAKER_03: quarter two next year.
• 24:24
  SPEAKER_03: As equity group, we're fortunate that we quite diversified regionally as well.
• 24:28
  SPEAKER_03: So that has helped support our earnings.
• 24:30
  SPEAKER_03: Also, we've been able to diversify our revenue streams within Kenya, although there's an element of
• 24:37
  SPEAKER_03: correlation between our banking business,
• 24:39
  SPEAKER_03: insurance business,
• 24:40
  SPEAKER_03: given that these are generally impacted by overall economic activity.
• 24:43
  SPEAKER_03: The one key aspect of our business is our non-funded income business.
• 24:47
  SPEAKER_03: This is quite a defensive revenue stream of ours.
• 24:50
  SPEAKER_03: And I think the importance of the business,
• 24:51
  SPEAKER_03: hopefully you'll get a sense of how we look at our business in terms of the
• 24:56
  SPEAKER_03: different business verticals,
• 24:57
  SPEAKER_03: the defensive revenues that are quite annuity in nature when business cycles play out.
• 25:02
  SPEAKER_03: So a key part of our diversification,
• 25:05
  SPEAKER_03: in addition to the geographic and the business verticals,
• 25:08
  SPEAKER_03: is also how we look at the quality of our revenue streams through non-funded income.
• 25:13
  SPEAKER_03: And these are essentially transactional businesses that are quite defensive in a down cycle.
• 25:18
  SPEAKER_03: So our payments business, what we do in cash management, etc.
• 25:21
  SPEAKER_03: These are business lines that we continue to invest.
• 25:24
  SPEAKER_03: You would have noticed that our cost growth,
• 25:26
  SPEAKER_03: particularly other costs on our P&L,
• 25:28
  SPEAKER_03: continue to grow quite healthily at north of around 30%.
• 25:32
  SPEAKER_03: This is essentially investment into our capacity and in terms of our capability of
• 25:37
  SPEAKER_03: launching new products down the road.
• 25:39
  SPEAKER_03: And where we're investing is essentially in IT and is an element also of
• 25:44
  SPEAKER_03: of the capacity building of our staff as we look to introduce new product lines,
• 25:50
  SPEAKER_03: including on the insurance side,
• 25:51
  SPEAKER_03: and also as we look to have this ambitious plan.
• 25:54
  SPEAKER_03: So Kenya, it's starting to stabilize.
• 25:56
  SPEAKER_03: We expect some sort of recovery starting to play out in the first half of next year.
• 26:00
  SPEAKER_02: Thanks Brent.
• 26:01
  SPEAKER_02: I'll come back to Willy and Patti.
• 26:02
  SPEAKER_02: In terms of context,
• 26:04
  SPEAKER_02: for someone coming to DRC,
• 26:05
  SPEAKER_02: what are some of the key areas that they could be investing in?
• 26:09
  SPEAKER_02: Let's say if a Kenyan is seeking to do business in DRC,
• 26:13
  SPEAKER_02: what are some of the emerging sectors that someone should pay attention to?
• 26:16
  SPEAKER_02: And then that's for Willy.
• 26:18
  SPEAKER_02: And then for Patti,
• 26:19
  SPEAKER_02: in which regions is the bank operating there and how their growth is progressing in
• 26:23
  SPEAKER_02: those regions?
• 26:23
  SPEAKER_02: So we start with Willy and then Patti.
• 26:25
  SPEAKER_01: I think strategically the first thing to consider,
• 26:28
  SPEAKER_01: because looking across the DRC opportunities are pretty much in every region,
• 26:33
  SPEAKER_01: in every locality,
• 26:34
  SPEAKER_01: right?
• 26:35
  SPEAKER_01: But now,
• 26:35
  SPEAKER_01: as we simply ask,
• 26:37
  SPEAKER_01: so what would be that industry for any investors coming from the DRC to come and
• 26:42
  SPEAKER_01: then consider?
• 26:43
  SPEAKER_01: As has been said, agriculture has one of the greatest potential in terms of impacting the people.
• 26:49
  SPEAKER_01: But given the infrastructural challenges,
• 26:51
  SPEAKER_01: for someone coming from Eastern Africa,
• 26:53
  SPEAKER_01: I think to penetrate the markets given the proximity,
• 26:56
  SPEAKER_01: one area will be looking into agriculture in Eastern DRC because of the climate,
• 27:00
  SPEAKER_01: because of cultural population on both sides.
• 27:03
  SPEAKER_01: I think it's easier and more convenient for any investors coming from Eastern Africa.
• 27:08
  SPEAKER_01: Now,
• 27:09
  SPEAKER_01: as we're getting into the inland of the DRC,
• 27:11
  SPEAKER_01: I would believe hospitality also will be that sector which investments can really
• 27:17
  SPEAKER_01: produce results.
• 27:18
  SPEAKER_01: As I said,
• 27:19
  SPEAKER_01: in Kinshasa alone,
• 27:20
  SPEAKER_01: there is a high demand for basic infrastructure,
• 27:22
  SPEAKER_01: and it goes from building housing,
• 27:24
  SPEAKER_01: building hotels,
• 27:25
  SPEAKER_01: and so on.
• 27:26
  SPEAKER_01: If you see in Kenya,
• 27:27
  SPEAKER_01: I think they are quite ahead in terms of hospitality,
• 27:30
  SPEAKER_01: given the expertise,
• 27:31
  SPEAKER_01: given the connectivity with the rest of the globe.
• 27:34
  SPEAKER_01: But this is an area.
• 27:35
  SPEAKER_01: where I believe there could be a low-hanging fruit for investors coming from
• 27:38
  SPEAKER_01: Eastern Africa,
• 27:39
  SPEAKER_01: specifically in Kenya,
• 27:40
  SPEAKER_01: to come in and invest.
• 27:42
  SPEAKER_01: And then I mentioned also another one.
• 27:44
  SPEAKER_01: You will see basic needs of the population, whether it's food or pharmaceutical industry.
• 27:50
  SPEAKER_01: I think that is...
• 27:51
  SPEAKER_01: can also be looked at because most players here are also looking to investment.
• 27:56
  SPEAKER_01: You'll see we are still highly dependent on imports, right?
• 27:59
  SPEAKER_01: So if any investors coming from Kenya or any other country in Eastern Africa where
• 28:03
  SPEAKER_01: it's been developed,
• 28:04
  SPEAKER_01: we can only believe industry,
• 28:06
  SPEAKER_01: food and industry,
• 28:08
  SPEAKER_01: agriculture.
• 28:08
  SPEAKER_01: I think internal transformation can present a quick conversion in terms of
• 28:11
  SPEAKER_01: opportunities and then our returns on any investment.
• 28:14
  SPEAKER_01: The other one will be education and health.
• 28:17
  SPEAKER_01: Kenya has quite an impressive network in terms of schools, in terms of education.
• 28:22
  SPEAKER_01: We'll also believe that industry itself can also present great opportunities for
• 28:27
  SPEAKER_01: any investor coming on health as well.
• 28:29
  SPEAKER_01: I think it's a critical and basic need in the DRC,
• 28:31
  SPEAKER_01: specifically in big hubs,
• 28:33
  SPEAKER_01: of which in Kenya will be number one.
• 28:35
  SPEAKER_01: Other areas such as Gumbash, even based on the DRC, Bukav.
• 28:38
  SPEAKER_01: This will be, I think, the three or four, where you can see a quick low hanging foot for conversion.
• 28:43
  SPEAKER_01: to opportunities and P&L.
• 28:45
  SPEAKER_01: Thank you.
• 28:45
  SPEAKER_02: Thank you, Willie.
• 28:46
  SPEAKER_02: So those are the areas of interest in terms of investing, low-hanging fruit, you'd say.
• 28:51
  SPEAKER_02: But Patina, in terms of regionalization, how is it looking like in terms of reach for equity group?
• 28:56
  SPEAKER_02: That should be the final question before I go through a round of questions, more to do with the outlook.
• 29:01
  SPEAKER_02: Over to you, Patina.
• 29:02
  SPEAKER_00: I think my colleague Willy has made a well presentation of opportunities.
• 29:07
  SPEAKER_00: But regarding equity group and our strategy,
• 29:10
  SPEAKER_00: we divided this country in five regions and regarding the opportunities and the
• 29:15
  SPEAKER_00: model of economic of each region.
• 29:17
  SPEAKER_00: First of all, I can start by the South region where I am now in the trade mission.
• 29:22
  SPEAKER_00: This is a region of the mining sector.
• 29:24
  SPEAKER_00: In this region, we have all the biggest mining companies doing copper, cobalt,
• 29:30
  SPEAKER_00: and cold also so this is the mining area and in this area you have five provinces
• 29:37
  SPEAKER_00: in each provinces you have a lot of opportunities yes i know that in this area also
• 29:41
  SPEAKER_00: you can find agricultural opportunities but in the country it is known like a
• 29:46
  SPEAKER_00: mining area we have also a eastern region which is more near
• 29:51
  SPEAKER_00: in the eastern region, some countries like Uganda, Rwanda, even Tanzania.
• 29:56
  SPEAKER_00: In that region, we have seven provinces or so.
• 30:00
  SPEAKER_00: We have several opportunities in that region.
• 30:03
  SPEAKER_00: We have some big mining company,
• 30:06
  SPEAKER_00: one in the Barrick Group,
• 30:08
  SPEAKER_00: one of the biggest mining companies in gold in the world.
• 30:11
  SPEAKER_00: But that region is essentially known as an agriculture region.
• 30:15
  SPEAKER_00: We have all the sustainable products.
• 30:19
  SPEAKER_00: that area.
• 30:21
  SPEAKER_00: We have cocoa, we have coffee, we have maize, we have also rice in that area.
• 30:26
  SPEAKER_00: So that is an agricultural area.
• 30:28
  SPEAKER_00: We have a central region which also has six provinces.
• 30:33
  SPEAKER_00: I have an
• 30:34
  SPEAKER_00: Kuru, which is also a big region.
• 30:37
  SPEAKER_00: But that region in the past was a mining region.
• 30:40
  SPEAKER_00: That is the region when you find the diamond in this country.
• 30:44
  SPEAKER_00: But it is a big region also for agriculture.
• 30:46
  SPEAKER_00: And nowadays, we have a lot of projects in agriculture in that area.
• 30:50
  SPEAKER_00: And I hope the bank and all other partners will be happy to invest in that region.
• 30:56
  SPEAKER_00: We have the big region in terms of population, which is the west region.
• 31:02
  SPEAKER_00: That is the economic and politics style of DRC where you have Chassa.
• 31:07
  SPEAKER_00: We have also five provinces in that area.
• 31:10
  SPEAKER_00: Yes,
• 31:11
  SPEAKER_00: that area,
• 31:11
  SPEAKER_00: it is the area where you have FMCG because of the number of the population first,
• 31:16
  SPEAKER_00: but you have also
• 31:18
  SPEAKER_00: Infrastructure,
• 31:19
  SPEAKER_00: you have agriculture in a big part of that,
• 31:21
  SPEAKER_00: which we call,
• 31:23
  SPEAKER_00: you have ,
• 31:25
  SPEAKER_00: which is a big part.
• 31:26
  SPEAKER_00: You can develop also agriculture.
• 31:29
  SPEAKER_00: And let's finish by the north region,
• 31:32
  SPEAKER_00: the region where we are going to open our new branches,
• 31:35
  SPEAKER_00: I think,
• 31:36
  SPEAKER_00: at the beginning of next year.
• 31:38
  SPEAKER_00: That is a region where you have all the reserves in terms of environmental protection of the world.
• 31:45
  SPEAKER_00: And we have also agriculture in that area.
• 31:48
  SPEAKER_00: some mining products, but a big, big part of that is essentially agriculture.
• 31:53
  SPEAKER_00: I think that is the strategy of recruiting in this country.
• 31:56
  SPEAKER_00: That is the way we are developing our business.
• 31:58
  SPEAKER_02: Thank you, Patti.
• 32:00
  SPEAKER_02: Willie, a quick question, perhaps before I go back to Brent.
• 32:03
  SPEAKER_02: Our listener is asking specifically,
• 32:05
  SPEAKER_02: when you look at DRC as a country,
• 32:08
  SPEAKER_02: more often than not in the Kenyan media,
• 32:10
  SPEAKER_02: you hear a lot to do with insecurity in DRC.
• 32:14
  SPEAKER_02: Could you address that in terms of a risk for growth in DRC?
• 32:20
  SPEAKER_02: So perhaps you can address the fears of many Kenyans and many listeners here who
• 32:24
  SPEAKER_02: want to understand exactly how the security situation is in DRC.
• 32:28
  SPEAKER_01: This is a very good question.
• 32:30
  SPEAKER_01: I think I'll go back to a very simple touch point.
• 32:33
  SPEAKER_01: First of all, DRC is big, right?
• 32:36
  SPEAKER_01: I think we're talking four times the size of Kenya.
• 32:39
  SPEAKER_01: And then as I've mentioned in my introduction,
• 32:41
  SPEAKER_01: we have major cities,
• 32:43
  SPEAKER_01: across the DRC,
• 32:44
  SPEAKER_01: maybe 10,
• 32:45
  SPEAKER_01: counting for 60-70% of the 100 million people.
• 32:48
  SPEAKER_01: Across the nation, across the geography, stability, I think is the case.
• 32:53
  SPEAKER_01: When we...
• 32:54
  SPEAKER_01: issues on the security side is mainly located in Eastern DRC.
• 32:58
  SPEAKER_01: Looking at the area, I don't think it accounts for more than 50% of the total area of the DRC.
• 33:03
  SPEAKER_01: Even in Eastern DRC,
• 33:05
  SPEAKER_01: where it's mostly referred to stability and so on,
• 33:08
  SPEAKER_01: where we have security concern is isolated in remote areas.
• 33:12
  SPEAKER_01: Today, we go from Kisangani, south of South Sudan, all the way down to Nono in Southern DRC in Katanga.
• 33:19
  SPEAKER_01: I think that's close to 2,000 kilometers.
• 33:22
  SPEAKER_01: I think across that border, 90
• 33:24
  SPEAKER_01: or even 95% is peaceful, right?
• 33:27
  SPEAKER_01: But there's a girl going to North Kivu in a couple of counties.
• 33:30
  SPEAKER_01: So this is where issues in terms of security is located.
• 33:34
  SPEAKER_01: But we come to Kinshasa.
• 33:36
  SPEAKER_01: You go to Matadi, you go to Goma, even at least on the DRC.
• 33:39
  SPEAKER_01: You go to Mbandaka.
• 33:41
  SPEAKER_01: In most cities, as I said, 98% of the DRC is beautiful.
• 33:45
  SPEAKER_01: And then we have a trade mission.
• 33:46
  SPEAKER_01: There's a good number of friends from Tanzania, from Kenya.
• 33:51
  SPEAKER_01: They've been here in Kinshasa for a couple of days.
• 33:54
  SPEAKER_01: And then they flew this morning to Xi.
• 33:56
  SPEAKER_01: I will maybe refer to them as ambassadors to really testify what they've seen, what they've observed.
• 34:02
  SPEAKER_01: Kinshasa is very vibrant.
• 34:04
  SPEAKER_01: They managed to move across the town without any issue.
• 34:07
  SPEAKER_01: And then today they end Lubumbashi.
• 34:09
  SPEAKER_01: They can also move around Lubumbashi and neighboring areas will not be an issue.
• 34:13
  SPEAKER_01: So I think it's more for perception than anything.
• 34:16
  SPEAKER_01: But overall,
• 34:17
  SPEAKER_01: I can assure that anyone can come here,
• 34:19
  SPEAKER_01: can also explore and then set up a business without any concern on peace.
• 34:23
  SPEAKER_03: Maybe just to contextualize this,
• 34:25
  SPEAKER_03: the distance from Kiev in Ukraine to,
• 34:27
  SPEAKER_03: say,
• 34:27
  SPEAKER_03: Berlin,
• 34:28
  SPEAKER_03: and we all know what's happening in Ukraine,
• 34:30
  SPEAKER_03: is the same distance from Nairobi to Goma.
• 34:32
  SPEAKER_02: Could you repeat that?
• 34:33
  SPEAKER_02: I think it's very important for someone to understand that.
• 34:36
  SPEAKER_03: There's obviously the wall in Ukraine and that distance from Kiev to, say, Berlin.
• 34:42
  SPEAKER_03: Maybe it's slightly longer, but...
• 34:44
  SPEAKER_03: pretty much in the ballpark, is the distance from, say, Nairobi to Goma in the eastern DRC.
• 34:52
  SPEAKER_03: And similarly,
• 34:53
  SPEAKER_03: the distance from Goma to Kinshasa is,
• 34:56
  SPEAKER_03: and maybe,
• 34:57
  SPEAKER_03: Willie,
• 34:57
  SPEAKER_03: you can correct me,
• 34:58
  SPEAKER_03: I think it's somewhat similar,
• 35:00
  SPEAKER_03: just to listen to context.
• 35:02
  SPEAKER_03: And you have,
• 35:02
  SPEAKER_03: obviously,
• 35:03
  SPEAKER_03: you have a war taking place,
• 35:04
  SPEAKER_03: a full-out war between two countries,
• 35:07
  SPEAKER_03: between Russia and Ukraine.
• 35:08
  SPEAKER_02: In context, then that means that people maybe consider it a little bit too much in terms of the size.
• 35:13
  SPEAKER_02: They forget the size of their country in the context of the insecurity that they discuss, right?
• 35:18
  SPEAKER_03: No, it's something that can't be ignored.
• 35:21
  SPEAKER_03: And we're not saying it should be ignored.
• 35:23
  SPEAKER_03: But since we entered the DRC and we've invested almost $220,
• 35:27
  SPEAKER_03: $230 million of the last nine,
• 35:31
  SPEAKER_03: 10 years that we have been in the DRC and more recently about two years ago when we
• 35:35
  SPEAKER_03: injected a further $70 million.
• 35:37
  SPEAKER_03: Our investment into DRC more recently,
• 35:39
  SPEAKER_03: and in spite of the conflict in Eastern DRC,
• 35:44
  SPEAKER_03: hopefully gives a sense to investors and potential investors,
• 35:47
  SPEAKER_03: our sense of conviction and our sense of the risks.
• 35:51
  SPEAKER_01: I can add also another sentence.
• 35:53
  SPEAKER_01: Ourself is an investment entity.
• 35:55
  SPEAKER_01: We've been in the DRC for so many years.
• 35:58
  SPEAKER_01: So we are the second largest bank in terms of balance sheets,
• 36:01
  SPEAKER_01: but with the largest network in terms of physical presence.
• 36:04
  SPEAKER_01: So we pretty much trust the country in major cities, small cities, and localities, right?
• 36:10
  SPEAKER_01: Of our presence here in the DRC,
• 36:12
  SPEAKER_01: we've never come across an incident which will present a risk to our business.
• 36:16
  SPEAKER_01: We also need to remind everyone we operate in a very sensitive industry, which is called banking.
• 36:21
  SPEAKER_01: We are careful on where we put our feet.
• 36:24
  SPEAKER_01: But going back to our history of our presence in the DLC,
• 36:27
  SPEAKER_01: despite the infrastructure challenges,
• 36:28
  SPEAKER_01: despite the size,
• 36:29
  SPEAKER_01: but we never come across major incidents and they will continue to grow and remain
• 36:33
  SPEAKER_01: quite bullish in developing our network and then with an impact on the people.
• 36:37
  SPEAKER_02: Brent, now you could give us a bit of an outlook.
• 36:40
  SPEAKER_02: If you look out five years from now, where would you want Equity Group to be at, Equity Group?
• 36:47
  SPEAKER_02: group in the DRC itself and also Africa as a whole.
• 36:51
  SPEAKER_02: What's your vision and how does that fit into your overall strategy as a group?
• 36:56
  SPEAKER_03: As a group,
• 36:57
  SPEAKER_03: we intend to have 100 million customers by 2030,
• 37:00
  SPEAKER_03: so maybe not so much five years,
• 37:02
  SPEAKER_03: but call it in the next seven years,
• 37:03
  SPEAKER_03: we'll
• 37:03
  SPEAKER_03: expect over 100 million customers.
• 37:05
  SPEAKER_03: For us,
• 37:06
  SPEAKER_03: the focus is more about the customer target than necessarily the number of flags we
• 37:12
  SPEAKER_03: plant our map.
• 37:13
  SPEAKER_03: I did highlight that we are creating a very interesting corridor.
• 37:16
  SPEAKER_03: That corridor remains probably the priority region for us.
• 37:20
  SPEAKER_03: We expect our full verticals to
• 37:23
  SPEAKER_03: continue expanding and more importantly, to replicate across all our markets.
• 37:28
  SPEAKER_03: So we expect to have bank,
• 37:30
  SPEAKER_03: insurance,
• 37:31
  SPEAKER_03: technology activities,
• 37:32
  SPEAKER_03: and importantly as well,
• 37:33
  SPEAKER_03: our foundation activities across all our markets.
• 37:36
  SPEAKER_03: We also see the group becoming quite a significant investment ambassador for the continent.
• 37:43
  SPEAKER_03: And definitely already we've established ourselves for the Eastern Central Africa region.
• 37:46
  SPEAKER_03: We intend to be a top three player in all our markets,
• 37:50
  SPEAKER_03: and that'll give you a sense of the acquisition of a bank in Rwanda,
• 37:55
  SPEAKER_03: and hence also why we acquired BCDC and DRC.
• 37:58
  SPEAKER_03: In the DRC business, we will likely remain the biggest investor outside of mining in the DRC.
• 38:05
  SPEAKER_03: I think that needs to be strict,
• 38:06
  SPEAKER_03: that we are the largest investor outside of the mining industry into the DRC.
• 38:11
  SPEAKER_03: We've enhanced the management structure and capacity to ensure,
• 38:15
  SPEAKER_03: and Patti mentioned the five regions,
• 38:17
  SPEAKER_03: that the five regions are well represented in terms of our presence.
• 38:21
  SPEAKER_03: We have introduced a deputy MD structure where we have three deputy MDs in our business there.
• 38:28
  SPEAKER_03: And the DRC,
• 38:30
  SPEAKER_03: together with the group,
• 38:31
  SPEAKER_03: we expect food and agriculture to be essentially 30% of our business in terms of
• 38:36
  SPEAKER_03: the economic sectors in our loan book.
• 38:39
  SPEAKER_03: Manufacturing will be a big focus as we look to develop value chains.
• 38:42
  SPEAKER_03: And as I mentioned earlier on, drive a lot more value-adding value chains.
• 38:46
  SPEAKER_03: Manufacturing will be 15% of our loan book.
• 38:49
  SPEAKER_03: These targets are not by chance.
• 38:52
  SPEAKER_03: They're somewhat reflective of the GDP of the markets where we are.
• 38:55
  SPEAKER_03: And as I mentioned, 100 million customers.
• 38:57
  SPEAKER_03: And we expect to get as part of our focus on trade mission and driving connectivity,
• 39:02
  SPEAKER_03: intra-Africa trade,
• 39:02
  SPEAKER_03: regional trade.
• 39:03
  SPEAKER_03: We expect to be the number one trade bank in the region.
• 39:06
  SPEAKER_03: So we'll have licenses on the continent.
• 39:08
  SPEAKER_03: You would have seen we have a rep office in Ethiopia.
• 39:11
  SPEAKER_03: We've always signaled that we have interest in Ethiopia.
• 39:14
  SPEAKER_03: But importantly, beyond licenses, we more recently opened some country desks.
• 39:19
  SPEAKER_03: Last week,
• 39:19
  SPEAKER_03: we opened a German desk,
• 39:21
  SPEAKER_03: and we do a lot of activities outside of the continent as we look to drive activity
• 39:27
  SPEAKER_03: between Africa and the markets that have the factors of production,
• 39:30
  SPEAKER_03: whether capital,
• 39:31
  SPEAKER_03: skills,
• 39:32
  SPEAKER_03: and technology.
• 39:32
  SPEAKER_03: technology-stroke machinery for us to essentially mechanize smallholder farmers,
• 39:37
  SPEAKER_03: drive innovation,
• 39:38
  SPEAKER_03: and also importantly to crowd in investment into the value chains that we are developing.
• 39:44
  SPEAKER_03: So we remain focused on what is amongst the highest growing regions in the world.
• 39:50
  SPEAKER_03: And because we plan to be systemic in these markets, we mirror this growth as well.
• 39:54
  SPEAKER_03: Hopefully that answers your question, Eric.
• 39:56
  SPEAKER_02: Yes, it does.
• 39:57
  SPEAKER_02: Quick questions for Willy and Paddy.
• 39:59
  SPEAKER_02: Someone is asking how much capital they would need to venture into agriculture in Congo.
• 40:03
  SPEAKER_02: And another quick one is also how someone can participate in the trade mission that
• 40:07
  SPEAKER_02: you're having to DRC so that you can demystify the country for someone.
• 40:11
  SPEAKER_02: And then someone's also asking the very high interest rates that are charged in DRC, around 25%.
• 40:15
  SPEAKER_02: So maybe we can answer that one quickly and then we'll wind up.
• 40:18
  SPEAKER_01: Okay, I'll start with the first one in terms of level of investments needed to consider agriculture.
• 40:23
  SPEAKER_01: I think it goes from owning a small farm
• 40:25
  SPEAKER_01: which can go anywhere from $5,000 to any amount higher.
• 40:29
  SPEAKER_01: But again, potential needs are quite significant, right?
• 40:32
  SPEAKER_01: I think the investment that is in agriculture can easily go to the billion above mark.
• 40:37
  SPEAKER_01: But there is space for everyone.
• 40:39
  SPEAKER_01: We continue to believe the wealth model will be with smallholder farmers.
• 40:43
  SPEAKER_01: Opportunities can be created where the needs are in terms of people and so on.
• 40:48
  SPEAKER_01: No high interest rates in the DRC.
• 40:51
  SPEAKER_01: I think I need to remind everyone, DRC is a dollarized economy.
• 40:55
  SPEAKER_01: More transactions,
• 40:56
  SPEAKER_01: deposits,
• 40:57
  SPEAKER_01: and then any movement of liquidity across the economy,
• 41:00
  SPEAKER_01: unfortunately,
• 41:01
  SPEAKER_01: is dollar-based.
• 41:02
  SPEAKER_01: Only 10%, if not less, of activities is CES, which is a local current here.
• 41:08
  SPEAKER_01: On our federal metrics, it's the 25%.
• 41:11
  SPEAKER_01: Based on the Central Bank of Congo,
• 41:13
  SPEAKER_01: we discount rates on which the impacts on what most people do here remains quite significant.
• 41:18
  SPEAKER_01: Our lending, these are lending activities, even equity across the banking industry.
• 41:23
  SPEAKER_01: I think 90% of the loan portfolio are all in dollar,
• 41:26
  SPEAKER_01: for which it goes anywhere from 7% to 11% for corporate lending.
• 41:30
  SPEAKER_01: And then I usually move to SMEs and consumers around 12% to 15%.
• 41:33
  SPEAKER_01: A bit higher as you take more risk on the large base in terms of consumers and so on.
• 41:38
  SPEAKER_02: Maybe quickly maths from Willy and Patty in terms of closing thoughts for the
• 41:41
  SPEAKER_02: spaces and how people can reach out to you.
• 41:44
  SPEAKER_02: And then Brent can give us the overall closing pitch and invite listeners to join
• 41:48
  SPEAKER_02: them in the journey to growing DLC.
• 41:50
  SPEAKER_02: We'll start with Patty and then Willy.
• 41:52
  SPEAKER_00: Maybe before the conclusion, just a few words tell you that we have server type
• 41:57
  SPEAKER_00: of forms of company recognizing DRC,
• 42:00
  SPEAKER_00: and some of them you have no limit that is as you have a obligation.
• 42:05
  SPEAKER_00: So you have the establishment,
• 42:07
  SPEAKER_00: you have a limited liability of company,
• 42:09
  SPEAKER_00: you have a public limited company.
• 42:12
  SPEAKER_00: For the three of them, you don't have any limit to invest in DRC.
• 42:16
  SPEAKER_00: I'm glad to be part of this meeting and to close.
• 42:19
  SPEAKER_00: Yes, equity basically say is willing to be part of your next future destination in DRC.
• 42:25
  SPEAKER_00: When you'll be coming in DRC, we will be able to give you all support.
• 42:30
  SPEAKER_00: And I think we really can confirm in DRC we are going to create an investment desk.
• 42:35
  SPEAKER_00: which will facilitate all investors in DRC.
• 42:39
  SPEAKER_00: So thank you.
• 42:40
  SPEAKER_00: I think we are going to share our contact.
• 42:42
  SPEAKER_00: I will share my contact on the chat so that everybody can contact if there is any
• 42:48
  SPEAKER_00: question and need of support.
• 42:50
  SPEAKER_00: I will finish by there.
• 42:51
  SPEAKER_00: Thank you.
• 42:52
  SPEAKER_01: And on my side, my words of conclusion.
• 42:54
  SPEAKER_01: So we are in the DRC for long term as we believe we can sustain the growth,
• 43:00
  SPEAKER_01: the impact on our population that despite the challenges
• 43:05
  SPEAKER_01: sponsored by the DRC, environment, and so on.
• 43:07
  SPEAKER_01: So the opportunities are quite massive through diversification in multiple sectors.
• 43:12
  SPEAKER_01: So we believe we can sustain support into agriculture, infrastructure, and so on.
• 43:17
  SPEAKER_01: And then there was a concern on stability,
• 43:19
  SPEAKER_01: but we believe political stability and improving economic conditions will play a
• 43:24
  SPEAKER_01: role in our success,
• 43:25
  SPEAKER_01: the impacts on the investors.
• 43:27
  SPEAKER_01: Maybe another sentence is,
• 43:29
  SPEAKER_01: so we believe creating our environment,
• 43:31
  SPEAKER_01: social,
• 43:31
  SPEAKER_01: and governance factor into our strategy so we can offer our suitable products and
• 43:35
  SPEAKER_01: services to meet,
• 43:36
  SPEAKER_01: as I said,
• 43:37
  SPEAKER_01: multiple times,
• 43:38
  SPEAKER_01: the diverse needs of our customers,
• 43:40
  SPEAKER_01: the population.
• 43:41
  SPEAKER_01: So we look forward really to making ourselves available.
• 43:44
  SPEAKER_01: If there's any question,
• 43:45
  SPEAKER_01: there is anything that we can do to make your journey moving to the DRC,
• 43:49
  SPEAKER_01: we'll be more than happy to partner.
• 43:51
  SPEAKER_01: So we can go create and then really see the change in the people that we serve here in the DRC.
• 43:57
  SPEAKER_01: And then my number and also my email will be shared to our former means.
• 44:00
  SPEAKER_01: So thank you again.
• 44:01
  SPEAKER_01: We look forward to speaking again next time.
• 44:03
  SPEAKER_02: Thank you, Willie.
• 44:03
  SPEAKER_02: Brent, now you can give us the closing pitch and perhaps invite people on the journey.
• 44:08
  SPEAKER_02: Great.
• 44:08
  SPEAKER_03: Thanks, Eric.
• 44:08
  SPEAKER_03: So our Africa Recovering Resilience Plan,
• 44:11
  SPEAKER_03: which is our strategic plan,
• 44:12
  SPEAKER_03: gives us clarity of direction as a group.
• 44:14
  SPEAKER_03: And that direction is essentially to help socially and economically transform
• 44:18
  SPEAKER_03: Africa through the development of value chains,
• 44:20
  SPEAKER_03: connecting the micro-small to the large enterprises,
• 44:23
  SPEAKER_03: connecting farmers to agro-processes to global markets.
• 44:27
  SPEAKER_03: Our three engines model gives us execution capability,
• 44:31
  SPEAKER_03: a very differentiated capability to essentially connect and develop these value chains.
• 44:37
  SPEAKER_03: And the history that the bank has in terms of generating returns
• 44:42
  SPEAKER_03: earnings growth,
• 44:43
  SPEAKER_03: as well as the challenges of the last few years from interest rate caps to COVID to
• 44:50
  SPEAKER_03: the global inflation interest has also caused for learnings in management in the
• 44:55
  SPEAKER_03: board that only makes us better as we go into the future.
• 44:59
  SPEAKER_03: So we will continue to learn from the past.
• 45:01
  SPEAKER_03: We have a track record and we operate in what will be one of the most sought after
• 45:06
  SPEAKER_03: corridors regions,
• 45:07
  SPEAKER_03: one of the highest growth regions,
• 45:09
  SPEAKER_03: and we should hopefully reflect that.
• 45:11
  SPEAKER_03: Thank you very much.
• 45:12
  SPEAKER_03: Thank you so much, Brent Willipati, for joining us.