Equity Group acquires 91.93% of Cogebanque in Rwanda
On 14 June Equity Group Holdings Plc, in keeping with its strategic regional expansion, announced its intention to acquire Compagnie Générale de Banque (Cogebanque) PLC Ltd in Rwanda after signing a binding term sheet that means that, upon completion of the transaction, EGH will pay an aggregate cash consideration of RWF 54.68 billion (USD 48.1 million) for a 91.93% controlling equity stake.
The acquisition of the fifth largest bank, and subsequent amalgamation of the business with that of Equity Group’s existing banking subsidiary in Rwanda, would position Equity Bank as the second largest bank in Rwanda after the merger with a total combined assets market share of 18% and a deposits market share of 19% based on audited accounts as at 31 December 2022.
Equity Group’s investment and capital allocation are guided by the company’s strong growth history and robust outlook. Dr James Mwangi, Group Managing Director and CEO, of Equity Group Holdings Plc said, “Rwanda’s 5-year average GDP growth rate at 6.5% ranks it amongst the 10 fastest growing countries in the world.” He added, “Rwanda’s economic growth is expected to be supported by a continued ease of doing business, recovery of global travel that will underpin its tourism and Meetings, Incentives, Conferences and Exhibitions (MICE) strategy targeting Foreign Direct Investments, regional integration, supporting trade and increasing contribution to its manufacturing sector. An underpenetrated financial services sector, with private sector credit and GDP being below 30% provides a well-defined secular growth opportunity for the financial services Group.”
“Equity Group’s acquisition of Cogebanque reflects the trust and confidence placed in Rwanda’s economic prospects and the resilience of our financial industry. The consolidation of these two institutions will undoubtedly contribute to the growth and stability of Rwanda’s banking sector, enabling us to provide better financial services to our citizens and facilitate economic empowerment,” said Dr Uzziel Ndagijimana, Rwanda’s Minister of Finance and Economic Planning.
Rwanda has been Equity Group’s highest return business whilst generating high growth and sustained efficient operations. The acquisition and amalgamation of Cogebanque will help shore and transform Equity Rwanda’s economies of scale with the resulting 54% 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). The larger balance sheet with an enhanced single lending obligor limit will better support the financing needs and requirements of businesses in the high-growth sectors further enhancing capacity for syndicated lending with other large banks in Rwanda to support the economic growth of Rwanda as envisioned under Vision 2050 and facilitate growth in key sectors of Tourism, MICE, and manufacturing.
“This acquisition and proposed amalgamation of Cogebanque with Equity Bank Rwanda will result in a strengthened national and regional commercial bank in line with, and underpinning Rwanda’s aspirations of being an international financial and business centre. Strong local, national, and regional commercial banks will be the foundation of such a regional and international financial services centre status”, concluded Dr Mwangi.
For more information visit www.equitygroupholdings.com