Equity buys Rwanda’s Cogebanque for Sh6.7 billion
Regional bank Equity Group will purchase the majority stake in Rwanda-based lender Cogebanque for a total cash payment of Kes6.7 billion (about $48.1 million). The Compagnie Generale de Banque (Cogebanque), often known as Cogebank, is the fifth largest commercial bank in Rwanda.
On Wednesday, Kenya’s Equity Bank stated that it has entered into a legally binding agreement to purchase 91.93 percent of the outstanding share capital of Cogebank.
Dr James Mwangi, Group Managing Director and CEO, Equity Group Holdings Plc said, “Rwanda’s five-year average GDP growth rate at 6.5 percent ranks it amongst the 10 fastest growing countries in the world.”
He added, “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 per cent provides a well-defined secular growth opportunity for the financial services Group.”
By acquiring the fifth-largest bank in Rwanda and combining its operations with those of Equity Group’s already-existing banking arm, Equity Bank would become the country’s second-largest bank.
With the combined subsidiary of Rwanda joining Equity Bank Kenya and EquityBCDC in the Democratic Republic of the Congo as banks with the second-largest market shares in their respective markets, the merger will firmly establish Equity Group’s systemic status regionally.
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“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,” said Dr Uzziel Ndagijimana, Rwanda’s Minister of Finance and Economic Planning.
While creating significant growth and consistently effective operations, Rwanda has provided Equity Group with the greatest return on investment.
With a 54 percent increase in the balance sheet as a result of the acquisition and merger of Cogebanque, Equity Rwanda will be better positioned to play a more significant role in the region’s economy and in line with Equity Group’s Africa Recovery and Resilience Plan (ARRP).
The existing 28-branch network of Cogebanque will be united with Equity Rwanda’s to give the combined bank nationwide distribution and coverage while also acquiring and bolstering its main strength, the franchise for Micro, Small, and Medium-sized Enterprises (MSME).
“This acquisition and proposed amalgamation of Cogebanque with Equity Bank Rwanda will result in a strengthened National and Regional Commercial bank in line with, and underpinning Rwanda’s aspirations of being an international financial and business center. Strong Local, National and Regional commercial banks will be the foundation of such a regional and International Financial Services Center status”, said Dr Mwangi.
