Equity Group Holdings (EGH) has halted its cross-border expansion bid after the failed acquisition of four banks in Rwanda, Zambia, Tanzania and Mozambique last week.

Equity Bank’s plan to acquire 100 per cent shareholding in BancABC of Zambia, Mozambique and Tanzania including 62 per cent of the shares of Banque Populaire du Rwanda Ltd fell through last week after 16 months of negotiations with Atlas Mara Ltd (ATMA).

We also don’t want to be telling shareholders that we are being cautious that is why we are withholding dividends for them and on the other side you are demonstrating offensive expansionist psychology of buying the banks,” said Mwangi

According to Dr Mwangi, growing the existing businesses will require minimum resources, free of uncertainty compared to cross border expansion (horizontal growth) under the current operating environment triggered by Covid-19 Pandemic.

“We had strong reservation on Equity’s acquisition of Atlas Mara subsidiaries in Tanzania, Zambia and Mozambique given the tough macroeconomic environment and the performance of these subsidiaries,” said Martin Kirimi, a senior associate, research, at Standard Investment Bank.

Equity Bank’s net profit for the three months to March 31 fell by 14 per cent to Ksh5.28 billion ($52.8 million) from Ksh6.15 billion ($61.5 million) in the same period last year   as a result of increased loan loss provisioning   to cushion the business against uncertainties related to Covid-19.