Kenya's Equity bank expands to South Sudan

NAIROBI, Sept 30 (Reuters) - Kenya's rapidly-expanding Equity Bank <EQTY.NR> has obtained approval to begin operations in South Sudan as the region recovers from 21 years of civil war, its chief executive said on Monday.

"We are happy to announce that we now have both approvals from the Central Bank of Kenya and the Bank of Sudan and we are now mobilising resources to start business there," James Mwangi, Equity Bank's chief executive, told journalists in Nairobi.

Equity hopes to start business in South Sudan by the end of 2008 in six towns -- the provincial capital Juba, Malakal, Yambyo, Wau, Kaya and Nimule.

"We will open up with six branches all over South Sudan but we are confronted with developing premises because that seems to be the challenge everyone is confronted with in southern Sudan."

Equity, which began life as a small rural building society in central Kenya, is now home to nearly half of all bank accounts in east Africa's largest economy and says it expects to see a 200 percent rise in pre-tax profit this year.

Equity has also opened branches in Uganda.

It will hope to take advantage of a relatively untapped market in South Sudan. Villagers who fled more than two decades of north-south civil war have been slowly returning after a 2005 peace deal, but the region remains under-developed.

"Because of the vastness of southern Sudan we will be using cellphone banking to overcome some of the challenges. People will be able to use their cellphones to debit and credit their bank accounts," said Mwangi.