Equity Group Holdings has announced its strategic move to acquire Compagnie Générale de Banque (COGEBANQUE) PLC Ltd in Rwanda.

The binding term sheet, which has been signed, will see Equity Group pay RWF 54.68 billion (USD 48.1 million) for a 91.93 per cent controlling equity stake in COGEBANQUE.

This acquisition marks a significant step for Equity Group as it continues to expand its presence in the region.

Upon completion of the transaction, Equity Bank will merge COGEBANQUE with its existing banking subsidiary in Rwanda to position itself as the second-largest bank in the East African country.

With a combined assets market share of 18 per cent and a deposits market share of 19 per cent based on audited accounts as of December 31, 2022, Equity Bank will solidify its systemic status in Rwanda.

Equity Group Managing Director and CEO Dr James Mwangi expressed confidence in Rwanda's economic growth and highlighted the potential for the financial services sector.

"Rwanda's 5-year average GDP growth rate at 6.5 per cent ranks it amongst the 10 fastest growing countries in the world. An underpenetrated financial services sector provides a well-defined secular growth opportunity for the financial services Group," Mwangi stated.

The Rwandan Government also welcomed Equity Group's investment and the consolidation of the two financial institutions.

Dr Uzziel Ndagijimana, Rwanda's Minister of Finance and Economic Planning, emphasized the positive impact on the banking sector and the country's economic stability.

"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," Ndagijimana said.

Equity Group noted that it's investments in Rwanda have been fruitful, with high returns and sustained efficient operations.

The acquisition and amalgamation of COGEBANQUE will further strengthen Equity Rwanda's position, providing a 54 per cent growth in the balance sheet and enabling the bank to play a more significant role in the economy.

This move aligns with Equity Group's Africa Recovery and Resilience Plan (ARRP) and supports the vision of Vision 2050, focusing on key sectors such as tourism, MICE (Meetings, Incentives, Conferences, and Exhibitions), and manufacturing.

By combining COGEBANQUE's 28 branches with Equity Rwanda's network, the merged bank will achieve countrywide distribution and coverage.

Additionally, it will enhance its services for Micro-, Small-, and Medium-sized Enterprises (MSMEs), which are at the core of its operations.

Equity Bank's robust product offerings and innovative technology solutions will benefit the MSME segment, further driving economic growth in Rwanda.

Mwangi underlined the significance of this acquisition for the financial landscape of Rwanda, stating, "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," he added.

Equity Group's strategic move to acquire COGEBANQUE reaffirms its commitment to expanding its presence in East Africa and contributing to the economic development of the region.

With this transaction, Equity Bank strengthens its position as a leading financial institution and underscores its confidence in Rwanda's growth prospects.