An increasing number of financial institutions in Kenya—the region’s economic giant—have ventured into neighbouring countries to tap into emerging opportunities that foster growth.

For Equity Group, the journey to becoming a top contender in Rwanda’s banking sector is a tale of strategic acquisitions, robust growth, and its continued commitment to enhancing financial inclusion.

The Group announced the acquisition of a 91.93 percent controlling stake in Cogebank, amounting to Kes6.7 billion in November 2023. This acquisition bolstered Equity Group’s presence in Rwanda, a country of nearly 14 million people, pushing the regional lender to become the second-largest bank in the country and effectively capturing an 18 percent market share.

The integration of Cogebank’s assets, including 28 branches and over 636 agents, has notably expanded Equity’s customer base and operational capacity in East Africa, adding 137,787 new customers to its service network.

Financial performance and growth

The onboarding of Cogebank has had a notable impact on Equity’s financial metrics in Rwanda. In the financial year ended December 30, the bank experienced a 27 percent growth in revenue a staggering 91 percent increase in deposits.

Additionally, net profits saw a robust 50 percent growth for the Kigali-based subsidiary. This strong performance underscores the effectiveness of Equity’s expansion strategy in the East African region through acquisition, highlighting not only growth in scale but also significant financial health improvements.

Equity has not only expanded its footprint but also enhanced the range of financial products and services offered to its newly on-boarded customers in Rwanda.

By integrating Cogebank’s operations, Equity has been able to offer more competitive and customized financial solutions. This strategic alignment aims to meet the diverse financial needs of its clientele while catalyzing economic growth and empowering local communities across Rwanda.

Last year, Rwanda’s Minister of Finance and Economic Planning noted that this merger will create a stronger, more resilient banking institution. The strengthened institution is better equipped to serve the Rwandan populace and contribute to national economic growth and development.

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50% increase in profit

In comparison to its competitors, notably the Bank of Kigali and I&M Bank, Equity’s performance has been remarkable. Despite the general challenges in the banking sector, Equity Bank Rwanda, benefitting from its recent consolidation with Cogebank, reported a 50 percent year-on-year increase in profit to Kes4.2 billion.

This is in stark contrast to Equity Bank Kenya, which saw a 20 percent decline in profits, highlighting the strategic significance of the Rwandan subsidiary in Equity’s broader regional portfolio, and growth trajectory.

Equity’s journey in Rwanda’s banking sector is a tale of how strategic acquisitions can transform a bank’s market position and financial health. By acquiring Cogebank, Equity has not only increased its market share but also enhanced its service delivery, thereby benefiting a broad segment of the Rwandan population, aligning with the regional lender’s mission to deepen financial inclusion and support economic development in the region.

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