Equity Group is aiming to gain a stronger foothold in the Rwandese market with the newly announced acquisition of Compagnie Générale de Banque (Cogebank), a Kigali-based commercial bank.
Equity Group is looking to acquire a controlling 91.93% stake in Cogebank for $48.1 million (Ksh6.71 billion). According to Equity, the move would make it the second-largest lender in the Rwandese market, strengthening its regional ambitions.
“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 percent and a deposits market share of 19 percent based on audited accounts as at December 31, 2022,” a statement from Equity noted.
Equity Group CEO Dr. James Mwangi highlighted Rwanda’s positive economic growth prospects as he touted the investment.
“Rwanda’s five-year average GDP growth rate at 6.5% ranks it among the ten fastest growing countries in the world. 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,” he noted.
Equity operates banking ventures in Kenya, Uganda, Tanzania, South Sudan, Rwanda, Democratic Republic of the Congo (DRC). Mwangi has repeatedly asserted that regional expansion is the central plank of its strategy as it looks to grow.
The move to acquire Cogebank will see Equity have the second-largest banking operation in DRC, with Equity CBDC and in Rwanda with the newly amalgamated entity. Dr. Mwangi has previously stated that he expects DRC to overtake Kenya as Equity’s most profitable market within the next few years.
Cogebank was established in 1999 by 42 Rwandan private investors, and over the years took in new international investors.