In a recent development, Equity Group, a prominent banking institution, has disclosed its anticipation of completing the acquisition of Rwanda’s Compagnie Générale de Banque, widely known as Cogebank, by the end of November. The acquisition, initially announced in June, involves a cash consideration of $48.1 million for a 91.93% stake in Cogebank, with plans to extend an offer for the remaining shares to attain full ownership.
Upon successful completion, the merger of Equity Bank with Cogebank is poised to establish the entity as the second-largest bank in Rwanda. The combined assets market share is projected to reach 18%, accompanied by a deposits market share of 19%, based on audited accounts as of December 31, 2022.
This significant acquisition underscores the confidence placed in Rwanda’s economic prospects and highlights the resilience of the financial industry. The move is expected to contribute substantially to the growth and stability of Rwanda’s banking sector.
The announcement regarding the acquisition and its expected finalization was made during an investor briefing on Monday, coinciding with the disclosure of the group’s quarter three financial results. Notably, the results revealed a remarkable 5% increase in profit after tax, surging from KSh 34.4 billion to KSh 36.2 billion in comparison to the same period last year.
Originally slated to conclude in September, the acquisition has faced delays attributed to the necessity of approvals from regulatory bodies in Rwanda, Kenya, and COMESA. Equity Group has clarified that only one key approval is pending, expressing confidence in the completion of the acquisition by November 30, 2023.
The acquisition process commenced in June with Equity Group entering into a binding term sheet with stakeholders, including the government of Rwanda, Rwanda Social Security Board, Sanlam Vie Plc, and Judith Mugirasoni. Cogebank, ranking fifth among Rwanda’s largest banks in terms of reported book value of total assets and shareholders’ equity at the close of 2022, serves a diverse clientele, including corporate entities, small and medium-sized enterprises, and retail customers. Following the acquisition’s conclusion, Equity Group intends to seamlessly integrate Cogebank with its existing subsidiary in Rwanda, Equity Bank Rwanda.
As of the latest financial update, the current share price of Equity Group Holdings Limited (EQTY) stands at KES 38.15. EQTY closed its last trading day (Tuesday, November 21, 2023) at 38.15 KES per share on the Nairobi Securities Exchange (NSE), recording a 0.4% gain over its previous closing price of 38.00 KES. This positive market performance reflects the ongoing investor confidence in Equity Group’s strategic initiatives and its impending acquisition of Cogebank.
Photo (EQUITY GROUP HOLDINGS)
21st November, 2023
Delino Gayweh
Serrari Financial Analyst
