Equity Bank Group has acquired the second largest bank in Rwanda known as Cogebanque.
Equity has taken over a controlling stake of up to 91.93 per cent in the bank that is also known as Compagnie Générale de Banque.
The two lenders have signed a binding term sheet that upon completion of the transaction, will see Equity Group pay an aggregate cash consideration of RWF 54.68 billion (USD48.1 million or Sh. 6.7 billion).
Following the acquisition, Equity Bank will now assume the position of the second largest bank in Rwanda with a total combined assets market share of 18 per cent and a deposits market share of 19 per cent based on audited accounts as at December 31, 2022.
According to a statement from Equity Group, the transaction will solidify Equity Group’s systemic status in the region with the amalgamated Rwanda subsidiary joining Equity Bank Kenya and Equity BCDC in the Democratic Republic of Congo as banks with the second largest market share in their respective markets.
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Equity Group Chief Executive Officer Dr. James Mwangi said an underpenetrated financial services sector with private sector credit and GDP being below 30 per cent provides a well-defined secular growth opportunity for the financial services group.
“Rwanda’s five-year average GDP growth rate at 6.5 per cent ranks it amongst the 10 fastest growing countries in the world,” said Dr. Mwangi.
“Its 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.”
Dr. Mwangi added that this acquisition and proposed amalgamation of Cogebanque with Equity Bank Rwanda will result in a strengthened National and Regional Commercial bank.
At the same time, the acquisition and amalgamation of Cogebanque will help shore and transform Equity Rwanda’s economies of scale with the resulting 54 per cent growth in balance sheet.
