Equity Group Holdings Plc, a financial services group, has announced its intention to acquire Compagnie Générale de Banque (Cogebanque) PLC Ltd in Rwanda.
The acquisition will involve Equity Group paying a cash consideration of RWF 54.68 billion (USD 48.1 million) for a 91.93% controlling equity stake in Cogebanque.
This move is part of Equity Group’s strategic regional expansion plan.
By acquiring Cogebanque, the fifth largest bank in Rwanda, Equity Group aims to merge its business with its existing banking subsidiary in Rwanda.
This merger would position Equity Bank as the second largest bank in Rwanda, with a combined assets market share of 18% and a deposits market share of 19% based on audited accounts as of December 31, 2022.
The acquisition would further solidify Equity Group’s position in the region, as the merged Rwanda subsidiary would join 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 decision to invest in Rwanda is driven by the country’s strong economic growth and favorable business environment.
Rwanda has been a high-return business for Equity Group, generating significant growth and operational efficiency.
The underpenetrated financial services sector in Rwanda, with private sector credit and GDP below 30%, presents a growth opportunity for Equity Group.
Dr. James Mwangi, Group Managing Director and CEO of Equity Group Holdings Plc, highlighted Rwanda’s economic prospects and the opportunities for the financial services group.
He mentioned Rwanda’s GDP growth rate, ease of doing business, recovery of global travel, regional integration, and the underpenetrated financial sector as factors that contribute to the growth potential in Rwanda.
Dr. Uzziel Ndagijimana, Rwanda’s Minister of Finance and Economic Planning, expressed confidence in Equity Group’s acquisition of Cogebanque, emphasizing the contribution it will make to the growth and stability of Rwanda’s banking sector.
The consolidation of the two institutions is expected to improve financial services for Rwandan citizens and support economic empowerment.
Acquisition and amalgamation of Cogebanque will enable Equity Rwanda to achieve economies of scale and strengthen its role in the economy and the region.
The larger balance sheet and enhanced lending capacity will better support the financing needs of businesses, particularly in high-growth sectors such as tourism, MICE (Meetings, Incentives, Conferences, and Exhibitions), and manufacturing.
Through the combination of Cogebanque’s network of 28 branches with Equity Rwanda’s existing network, the merged bank will achieve countrywide distribution and coverage.
Equity Group aims to leverage its strong product offering and innovative technology solutions to support the Micro-, Small-, and Medium-sized Enterprise (MSME) segment in Rwanda.
The acquisition and proposed amalgamation of Cogebanque with Equity Bank Rwanda align with Rwanda’s aspirations of becoming an international financial and business center.
Dr. Mwangi emphasized the importance of strong local, national, and regional commercial banks in realizing Rwanda’s goal of establishing itself as a regional and international financial services center.