Another day, another discrepancy? EquityBCDC seeks to reassure clients

In a press release published on 5 January 2023, EquityBCDC announced an account discrepancy of $11.1m (€10.4m) and $172.5m in Congolese francs ($84,000). The discrepancy was highlighted in the gradual integration of the accounts of the formerly separate institutions.

The revelation elicited very strong reactions on Congolese social media in response to this announcement. Fake images depicting chaos at banking locations were circulated online, with calls for EquityBCDC to be placed under surveillance by DRC’s central bank.

Transparency efforts

In its statement, Equity BCDC was categorical that no discrepancies were found in client deposits and accounts. According to the bank, the announced discrepancies represent only 3% of bank equity and 0.3% of the bank’s total assets.

Transparency efforts have fallen in line with regulations, but some believe that EquityBCDC should have limited its communication to supervisory authorities. Making these discrepancies known to the general public, while transparent, may have been counterproductive to assuring their clientele.

According to an internal source at the Congolese bank, “the press release played the part of a transparent agent, something that ought to be welcomed, especially in a country where the cult of lies and opacity rules supreme. Opacity and lies saved neither Fibank nor the Banque internationale pour l’Afrique au Congo”.

$11m is not the end of the world. EquityBCDC is strong enough to absorb this discrepancy

“$11m is not the end of the world. EquityBCDC is strong enough to absorb this discrepancy, and they have done well, in principle, to communicate what actually happened. However, in the case of an incident involving a minor institutional impact, the risk of a disproportionate reaction must be taken into account,” says a leading source in the Congolese banking sector.

EquityBCDC is headed by Célestin Mukeba Muntuabu, former CEO of ProCredit Bank Congo, and chaired by Nestor Ankiba, former ExxonMobile executive in central Africa. It currently claims total assets of $3.57bn, equity of $356.2m, 1.74 million customers, and approximately $3bn in deposits.

Historical difficulties

“The Congolese banking market, as inexperienced as it is, has experienced several episodes of difficulty and bankruptcy,” says our expert. This includes, in recent years, the liquidation of BIAC. With any banking issue comes the spectre of a new crisis in the minds of many in DRC.

Compared to the sub-Saharan average of 55%, only one in four people over the age of 15 has a bank or mobile money account. This is attributed to the relatively low access that the general population has to banking.

Investigations and sanctions

Equity BCDC, for its part, indicated that it had requested the support of national authorities and government agencies to partner in the investigations, The bank has warned that anyone deemed responsible for this discrepancy will be dealt with in accordance with industrial policy, be they criminal or clerical. Services and operations, according to the bank, will remain uninterrupted throughout DRC.

According to our banking source in Kinshasa, this situation is not believed to have a lasting effect on the beleaguered bank, nor the local banking sector. Though there are occasional economic scares, as was seen recently with Afriland First Bank, no one talks about it long-term. Our source says this scare may be over within two weeks.

Between June and September 2022, EquityBCDC increased its network from 70 to 81 branches in DRC, with an additional 40 in Kinshasa. At the end of September 2022, DRC represented 21.4% of Equity Group’s loan portfolio, behind Kenya (63.6%), well ahead of Uganda (7.2%), Rwanda (4%), and Tanzania (3.7%).