Equity Group Holdings has obtained a Capital Markets Authority (CMA) license to operate a stand-alone asset management unit, positioning Kenya’s largest bank by customer numbers to compete more directly for investor cash currently flowing out of traditional savings accounts.
Group CEO James Mwangi said the lender is responding to a market shift, noting that savers now want high-earning assets rather than conventional savings products.
He added that the venture would leverage Equity’s brand strength, distribution infrastructure and IT backbone to build what he called “a formidable business capable of distributing globally manufactured assets”.
The move marks a structural change: Equity’s collective investment schemes (CIS) — commonly known as unit trusts or mutual funds — have until now been run under its Equity Investment Bank subsidiary.
A dedicated asset management arm will let the group market money market, balanced, equity and other funds more aggressively, joining rivals Absa, Standard Chartered Kenya, Ecobank Kenya, KCB and I&M Group, which already run similar units.
The numbers explain the urgency. Commercial banks’ average return on ordinary savings accounts stood at 3.32 percent in June, against 6.84 percent for fixed deposits, per Central Bank of Kenya data. Money market funds, by contrast, are yielding an average of 8.4 percent — well above what Equity’s own unit trust currently offers at 5.22 percent.
That gap has been pulling deposits out of bank balance sheets and into CIS products, with total assets under management in special and money market funds hitting Sh851.7 billion by end-March, up 12.6 percent from December, according to CMA data. Bank deposits grew just 3.8 percent over the same period.
For Equity, the license is as much defensive as offensive: rather than lose depositors to competitors’ funds, it can now capture that migration internally while diversifying revenue beyond lending, insurance and fintech. Absa’s asset management book grew 40 percent to Sh49 billion in the year to June, illustrating the upside.
For ordinary savers, the entry of a bank with Equity’s reach could mean easier access to higher-yielding, professionally managed products — though such funds carry market risk that plain savings accounts do not.
