Equity Bank buys 92% stake in Cogebanque

Equity Group Holdings has acquired 92 per cent stake in Compagnie Générale de Banque (Cogebanque) Plc in Rwanda for $48.1 million (Rwf 54.68 billion).

This will make the Kenyan lender the second biggest bank in Rwanda in terms of asset value once the transaction is completed, subject to regulatory approvals.

The lender will command 18 per cent of Rwanda’s banking sector market and a deposits market share of 19 per cent based on audited accounts as at December 31, 2022.

The transaction is expected to solidify Equity Group’s systemic status in the region with the amalgamated Rwanda subsidiary joining Equity Bank Kenya and Equity BCDC in the Democratic Republic of Congo as banks with the second largest market share in their respective markets.

Equity Group MD and CEO James Mwangi said the bank’s investment and capital allocation is guided by the company’s strong growth history and robust outlook.

“Rwanda’s five-year average GDP growth rate at 6.5 per cent ranks it amongst the 10 fastest growing countries in the world,’’ he said.

Equity Group Holdings Group Managing Director and CEO James Mwangi.

He added that Rwanda’s economic growth is expected to be supported by a continued ease of doing business, and recovery of global travel that will underpin its tourism and Meetings, Incentives, Conferences and Exhibitions (MICE) strategy targeting Foreign Direct Investments (FDIs).

“Equity Group’s acquisition of Cogebanque reflects the trust and confidence placed in Rwanda’s economic prospects and the resilience of our financial industry,’’ Rwanda’s Minister of Finance and Economic Planning Uzziel Ndagijimana said.

He added that the consolidation of these two institutions will undoubtedly contribute to the growth and stability of Rwanda’s banking sector, enabling Equity Group to provide better financial services to citizens and facilitate economic empowerment.

Rwanda has been Equity Group’s highest return business whilst generating high growth and sustained efficient operations.

In a statement, the lender said the acquisition and amalgamation of Cogebanque will help shore and transform Equity Rwanda’s economies of scale with the resulting 54 per cent growth in the balance sheet, positioning it to play a more meaningful role across the economy and the region in line with Equity Group’s Africa Recovery and Resilience Plan (ARRP).

By combining Cogebanque’s existing network of 28 branches with that of Equity Rwanda, the combined bank will achieve countrywide distribution and coverage while acquiring and strengthening its Micro-, Small- and Medium-sized Enterprise (MSME) franchise, which is its core strength.

The MSME segment of the Rwanda economy will greatly benefit from Equity’s strong product offering and innovative technology solutions for the segment.

“This acquisition and proposed amalgamation of Cogebanque with Equity Bank Rwanda will result in a strengthened regional commercial bank in line with, and underpinning Rwanda’s aspirations of being an international financial and business center,’’ Mwangi said.

PM