The transactions come after Equity Group from Kenya (which also has a subsidiary in Rwanda) called of the plan of acquiring stakes in BPR Plc due to COVID-19 related effects. Talks for the canceled acquisition had started in April 2019 with the objective of reaching mutually acceptable terms for a strategic transaction.
After careful consideration, Atlas Mara (which owns 62 per cent share in BPR) and EGH mutually agreed to discontinue discussions recently.
Following the failed acquisition by Equity, Atlas Mara Limited (Atlas Mara) and KCB Group Plc (KCB) announced yesterday that they have signed a definitive agreement regarding a proposed acquisition of 62.06% of the issued share capital of BPR by KCB followed by a subsequent merger with KCB’s wholly owned subsidiary operating in Rwanda, KCB Bank Rwanda Plc.
According to a joint statement from both banks; the combined bank is expected to double its market share resulting in a robust balance sheet and capital structure that will support growth in the post covid-19 macroeconomic recovery period thus ensuring the banks’ customers benefit from being a part of one of the biggest Banking groups in East Africa.
Once implemented, the transaction is subject to the fulfillment of various conditions precedent amongst which, include regulatory approvals by the National Bank of Rwanda, the local and regional competition commission authorities and all relevant entities.
Following the legal merger of the two banks, the enlarged entity is expected to be the 2nd largest bank in the country and will be a majority owned subsidiary of KCB Group Plc.
Commenting on the development, The Managing Director of BPR Maurice Toroitich expressed delight for the planned acquisition and assured customers of better services as usual.
“We are very pleased to reach this agreement with KCB Group Plc. This transaction represents an opportunity for BPR to benefit from being part of the largest banking group in East Africa and I am confident we will benefit from KCB Rwanda’s digital banking capabilities, complementary branch and agents network, innovative product offering across retail, SME, corporate and payments as well as trade finance and international banking offering leveraging the broader KCB regional footprint,” he said.
“I want to assure our clients that the safety of their banking operations and high-quality customer service will remain our top priorities during the transition. They can look forward to new products and services as the combined institution pursues sustainable growth. Our mission to serve and support our customers during this challenging time; to leverage on the combined business which will contribute to meaningful economic development of the country. We look forward to working with the KCB Rwanda team,” added Toroitich.
KCB Rwanda Managing Director Mr. George Odhiambo said the merger anticipates expanded retail network and sustainable growth.
“We are delighted to have reached an agreement on a proposed merger with BPR, a strong retail and commercial bank with one of the largest branch network in the industry and long history spanning over 45 years in the country. This merger, will see the bank ranked 2nd largest bank in the country, which will increase our scale and improve our operating leverage by enabling us to deliver existing retail and wholesale offerings to a wider base of customers in Rwanda while positioning the bank for sustainable growth in the long-term,” he said.
Odhiambo also revealed that the merger will provide current KCB Rwanda customers with access to a larger network of branches and agents across the country, while BPR’s customers would benefit from best in class digital capability, transactional banking solutions, trade finance expertise and international banking offering from KCB.
“Through this transaction, we will play a greater role in Rwanda’s economic expansion, using our combined balance sheet to support our clients while leveraging our enhanced distribution network to deepen financial inclusion and provide lending and trade finance solutions to entrepreneurs and SMEs in Rwanda,” he stressed.
KCB Group Plc is East Africa’s largest commercial Bank that was established in 1896 in Kenya. Over the years, the Bank has grown and spread its wings into Tanzania, South Sudan, Uganda, Rwanda, Burundi and Ethiopia (Rep). Further to the banking businesses in these markets, KCB Group owns National Bank of Kenya, a Kenyan lender.
Today KCB Group Plc has the largest branch network in the region with 360 branches, 1,090ATMs and over 23,230 merchants and agents offering banking services on a 24/7 basis in East Africa. Additionally, KCB Group owns KCB Insurance Agency, KCB Capital Limited, KCB Foundation and Kencom House Limited as non-banking businesses. The Bank has a wide network of correspondent relationships totaling over 200 banks across the globe and our customers are assured of a seamless facilitation of their international trade requirements wherever they are.
The proposed transaction is firmly in line with Atlas Mara’s repositioning as a streamlined holding company with an increased focus on a core footprint. The merger will see BPR’s strong retail, commercial and SME loan capability and branch network leverage KCB Rwanda’s best in class digital platform and product suite to create a platform for further growth and the facilitation of financial inclusion for the unbanked in the country.
Corporate customers can expect to benefit from KCB Rwanda’s strengths in transactional banking, trade finance, treasury, international payments and loans through the wider distribution network of the enlarged bank and KCB’s presence in the key countries across the East African region.
BPR and KCB Rwanda will draw on Atlas Mara and KCB’s strong track records of post-merger integration to ensure a successful combination.