Equity Group, the leading and profitable bank in Kenya, has announced its plans to acquire a 91.9 percent stake in Compagnie Générale De Banque Plc (Cogebanque), a move that will significantly bolster its presence in Rwanda’s banking sector. The deal, valued at Ksh7.26 billion ($51.97 million), involves the purchase of shares from entities such as the Government of Rwanda, Rwanda Social Security Board, Sanlam Vie Plc, and Ms.
Judith Mugirasoni. Equity Group also intends to extend an offer to acquire the remaining shares in due course.
With the acquisition, Equity Bank will emerge as a major player, commanding an impressive 18% share of Rwanda’s banking sector. This strategic move will elevate Equity Bank to the position of the second-largest bank in Rwanda in terms of asset value, positioning it for substantial growth and influence in the country.
The acquisition of Cogebanque forms a critical part of Equity Group’s expansion strategy in Rwanda as it aims to strengthen its presence and solidify its position in the local banking industry. This initiative comes after a previous unsuccessful attempt by Equity to acquire a Rwandan bank, when a majority share purchase deal with Banque Populaire du Rwanda fell through in July 2020.
Kenyan banks, including Equity Group, have been actively pursuing acquisition opportunities across East Africa to diversify their revenue streams beyond Kenya. In the previous year, Kenyan banks witnessed a significant increase in net profit generated by their subsidiaries outside Kenya, nearly doubling from Ksh17.23 billion ($123.34 million) to Ksh32.51 billion ($232.71 million). These expansion efforts have resulted in substantial growth in loan books and the establishment of new branches.
The completion of Equity Group’s acquisition of Cogebanque is contingent upon customary conditions, including conducting due diligence and obtaining regulatory approvals from entities such as the Central Bank of Kenya, Banque Nationale du Rwanda, and the Comesa Competition Commission. Furthermore, the acquisition requires the approval of relevant boards and shareholders.
It’s worth noting that other Kenyan banks, including KCB, Family Bank, and I&M, are also actively pursuing expansion strategies through acquisitions in the region. Equity Group’s deal with Cogebanque will not only bolster its operations in Rwanda but also contribute to the overall growth and influence of Kenyan banks’ operations beyond their home country.
