Equity Group Holdings Plc – the region’s financial giant, has acquired a controlling stake in Rwanda’s local Bank – Compagnie Générale De Banque Plc (Cogebanque).
According to a notice shared by Equity Group, the deal will see the regional bank acquire a controlling stake at RWF54.68 billion ($47.75 million).
The lender, which tops the profitability chart in Kenya, announced on Wednesday it signed an agreement to acquire a 91.9 percent stake in Cogebanque in a deal that values the Rwandan bank at ($51.97 million).
The group says the move to acquire 91.9 percent shares in Cogebanque is in line with keeping with its strategic regional expansion.
The acquisition of the fifth largest bank, and subsequent merger of the business with that of Equity Group’s existing banking subsidiary in Rwanda, is expected to position Equity Bank as the 2nd largest bank in Rwanda after the merger with a total combined assets market share of 18% and a deposits market share of 19% based on audited accounts as at 31st December 2022.
The transaction would solidify Equity Group’s systemic status in the region with the merger of Rwanda subsidiary joining Equity Bank Kenya and EquityBCDC in the Democratic Republic of Congo as banks with the second largest market share in their respective markets.
Equity Group’s investment and capital allocation is guided by the Company’s strong growth history and robust outlook.
Dr James Mwangi, Group Managing Director and CEO, Equity Group Holdings Plc said the acquisition was informed by the positive economic trends and projections that put Rwanda on the right track.
“Rwanda’s 5-year average GDP growth rate at 6.5% ranks it amongst the 10 fastest growing countries in the world.” He said adding: “Rwanda’s economic growth is expected to be supported by a continued ease of doing business, recovery of global travel that will underpin its tourism and Meetings, Incentives, Conferences and Exhibitions (MICE) strategy targeting Foreign Direct Investments, regional integration, supporting trade and increasing contribution to its manufacturing sector,” “An underpenetrated financial services sector, with private sector credit and GDP being below 30% provides a well-defined secular growth opportunity for the financial services Group.” Dr. Mwangi said.
Rwanda Finance and Economic Planning Minister, Dr. Uziel Ndagijimana, said the Nairobi-based lender’s increased presence in Rwanda reflects the interest investors have in the country.
“Equity Group’s acquisition of Cogebanque reflects the trust and confidence placed in Rwanda’s economic prospects and the resilience of our financial industry. The consolidation of these two institutions will undoubtedly contribute to the growth and stability of Rwanda’s banking sector, enabling us to provide better financial services to our citizens and facilitate economic empowerment,” he said.
Equity Group has presence in six countries — DRC, Kenya, Uganda, Tanzania, South Sudan, Rwanda and a representative office in Ethiopia.
The lender, which is listed at the Nairobi Securities Exchange, has exported 40 per cent of its business to South Sudan, DRC, Tanzania, Rwanda and Uganda while holding 60 per cent of the operations in Kenya as part of the diversification plan.
