Kenya's Equity bank closes seven branches in S. Sudan.
May 25, 2017 (JUBA) - Kenya's Equity Bank Group has announced the closure of seven of its branches operating in war-torn South Sudan over the deteriorating economy, weak currency and hyperinflation.
Equity Bank South Sudan CEO James Mwangi (Gurtong)
The bank's chief executive officer, James Mwangi confirmed the closure of seven of the bank's 12 branches in the East African nation.
"Because of uncertainty, and because of a lack of peace, we have been forced to reduce those branches," said Mwangi, while addressing various stakeholders in the capital, Juba on Tuesday.
Four years of conflict in South Sudan's has seen a decline in the country's oil production, yet oil still accounts for more than 90% of its annual budget.
Since December 2016, Equity bank has reportedly held assets worth Sh. 11.1 billion in South Sudan. However, the business was said to be operating in tough conditions, recording net interest loss of Sh. 55 million and a loss before tax of Sh. 528 million.
"Last year, that devaluation caused us to write off a loss of Sh. 6 billion ($58.14 million). It is not performance; it is what you could call an economic meltdown," said Mwangi.
KCB Group, East Africa's biggest bank by assets recently said it was shutting more branches due to hyperinflation and shortage of dollars. KCB was one of the first foreign banks to move into South Sudan more than a decade ago.
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