RWANDA – KCB Group Plc has completed the purchase of a majority stake in Banque Populaire du Rwanda Plc (BPR) after acquiring shares previously owned by Arise B.V and Mauritius-based Atlas Mara Limited.
The transaction has already received the necessary approvals in Kenya and Rwanda, removing the last hurdle in the acquisition process.
KCB acquisition becomes effective from 25th August 2021
This now makes the Kenyan lender the majority shareholder in BPR with effect from 25th August 2021.
According to KCB Group Chief Executive Officer and Managing Director, Joshua Oigara, the lender now has a competitive edge in deepening its ongoing strategy to scale up a regional foothold.
He said the combined financial muscle of both lenders would provide KCB with an opportunity to drive the economic empowerment and financial inclusion agenda in the East Africa region.
The CEO added that KCB intends to increase its scale and improve operating leverage by delivering its existing retail and wholesale offerings to a broader customer base in Rwanda while positioning the bank for sustainable growth in the long term.
BPR is considered strong in retail and SME Banking with the largest branch network in Rwanda and boasts of a long history in Rwanda spanning over 45 years.
The Kenyan lender, according to Oigara, plans to eventually create one entity in Rwanda to be named BPR Bank by merging KCB Bank Rwanda and BPR.
The combined outfit will become the second-largest bank in Rwanda.
The Nairobi Securities Exchange-listed lender has appointed an integration committee made up of senior executives to spearhead the attainment of the single entity in Rwanda in the coming months.
The merger will provide current KCB Rwanda’s customers with access to a more extensive network of branches and agents across the country.
In contrast, BPR’s customers will benefit from best-in-class digital capability, transactional banking solutions, trade finance expertise and international banking offering from KCB.
Meanwhile, the Kenyan lender intends to acquire 100% shareholding of African Banking Corporation Tanzania Limited (BancABC) from ABC Holdings Limited (96.6%) and Tanzania Development Finance Company Limited (3.4%).
The proposed acquisition is, however, pending some approvals.
The acquisition of BPR and BancABC will provide the Kenyan bank with the opportunity to rapidly scale up its balance sheet and revenue streams while leveraging on cost synergies.
KCB Group PLC signed a definitive agreement with Atlas Mara to acquire Banque Populaire du Rwanda Plc (BPR) and African Banking Corporation Tanzania (BancABC) in 2020.
The proposed transaction would increase the bank’s regional footprint, as the bank group explores new group opportunities.
KCB was to pay for both acquisitions in cash based on the asset value of the banks upon completion of the transactions, using the price-to-book multiple of 1.09 for BPR and 0.42 for BancABC.
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