Equity Group Holdings acquires Cogebanque (Compagnie Générale de Banque Plc) in Rwanda

On June 14, 2023, Equity Group Holdings (EGH) announced the acquisition of a 91.93% stake in Cogebanque from a group of investors (including the Rwandan government and Rwanda Social Security Board) pending regulatory approval. It is an all-cash offer of RWF59.5 billion (c.USD52.4 million) or RWF297,406/share. The term sheet also stipulates that the Rwandan government will acquire Cogebanque’s head office within twelve months for a consideration of RWF11.48 billion. Adjusting for this, we estimate an effective acquisition price of RWF239,966/share, which is 1.0x Cogenbanque’s FY22 Book Value Per Share (BVPS).

According to the disclosure and our estimates, Cogebanque had an asset base of KES33.9 billion in FY22 (2.3% of EGH’s FY22 asset base), a deposit base of KES21.8bn (2.1%), a loan book of KES16.9 billion (2.4%), and PAT of KES1.1bn (2.4%). We also estimate an FY22 ROE of 20.0% for Cogebanque. The press release also indicated that Cogebanque has 28 branches versus 14 for Equity Rwanda. The acquisition, therefore, has a modest impact on Equity at the group level but will boost the loans/ deposits/ assets market share of its Rwandan subsidiary from 10 – 14% to 17 – 18%, effectively making it the second-largest bank in the country (from the third largest).