Equity Group Holdings planning to acquire Rwandan Bank, Compagnie Générale de Banque

Equity Group Holdings has announced its intention to acquire Cogebanque PLC Ltd, a Rwandan bank, as part of its regional expansion strategy. The two banks have already signed a binding term sheet, and upon completion of the transaction, Equity will pay $48.1 million (Sh6.71 billion) for a 91.93% controlling equity stake.

With this acquisition, Equity Bank aims to merge the business of Cogebanque with its existing banking subsidiary in Rwanda. This move will position Equity Bank as the second largest bank in Rwanda, holding an 18% combined assets market share and a 19% deposits market share, based on audited accounts as of December 31, 2022.

By expanding into Rwanda, Equity Group solidifies its presence in the region. The amalgamated Rwanda subsidiary will join Equity Bank Kenya and EquityBCDC in the Democratic Republic of Congo as banks with the second largest market share in their respective markets.

James Mwangi, the Group Managing Director and CEO of Equity Group Holdings, highlighted Rwanda’s favorable economic conditions, including its high GDP growth rate of 6.5% and its focus on ease of doing business, tourism, and regional integration. Mwangi emphasized that the acquisition of Cogebanque will contribute to Equity Group’s Africa Recovery and Resilience Plan (ARRP) and support the bank’s growth strategy in the region.

Kenyan banks have been seeking regional expansion in recent years to diversify their balance sheets and take advantage of new opportunities in trade and investment financing. Instead of starting operations from scratch, as they did in the past, these banks are now pursuing acquisitions to accelerate their growth and achieve economies of scale.

Equity Bank’s acquisition of Cogebanque is expected to strengthen the national and regional commercial banking sector in Rwanda, aligning with the country’s vision of becoming an international financial and business center.