KCB Group bought Rwandese lender Banque Populaire du Rwanda (BPR) from Atlas Mara Ltd for Kes3.9 billion, latest filling by the London-listed financial services firm shows.
Annual financial statements released by Atlas Mara indicate that KCB Group paid the firm Kes3.6 billion in cash and Kes311.4 million as fair value for deferred consideration.
In August, KCB Group Chief Executive Officer Joshua Oigara announced they had concluded the deal to buy BPR in what made KCB Group the majority shareholder in the Kigali based lender.
KCB said it will merge its new bank with its subsidiary, KCB Bank Rwanda, and rename the combined entity as BPR Bank, making it the second largest bank in the country of 12.6 million people.
The acquisition is set to grow KCB footprint in retail banking in Rwanda as it seeks to reinforce its position as the largest lender by assets in the Eastern Africa region.
“The Group successfully completed the sale of its 62.06 per cent shareholding in BPR to KCB on 25 August 2021. The transfer of control to KCB was effective as at that date. Details of the sale of the subsidiary are, total consideration $35.859 million,” Atlas said.
In November last year, Atlas entered into an agreement with KCB Group Plc for the sale of the Group’s 62.06 per cent shareholding in BPR and 97.3 per cent stake in African Banking Corporation Tanzania Limited.
KCB Group concluded the purchase in Rwanda and set sights on Tanzania where it would buy an additional 3.4 per cent stake from Tanzania Development Finance Company Limited to own the entire bank.
In its first quarter financial presentation, KCB said the aggregate completion consideration that would be payable by KCB for acquisition of the 100 per cent of the two entities is estimated at Kes6.2 billion ($56.9 million).
Atlas now says the Tanzania deal has also received regulatory approvals and will be closed at the end of this year.
“The transaction, which has been approved by the Bank of Tanzania, is now subject to fulfilment of customary conditions precedent. Sale of ABC Tanzania is expected to be concluded before the end of the year,” Atlas noted.
High rate of financial inclusion and digital banking have forced Kenyan lenders to look outside the Kenyan market for growth.
The push for bank acquisitions has seen KCB battle with Equity Bank Group for regional domination with both racing to push their asset base to over Kes1 trillion mark.
KCB Bank and Equity Group have been top rivals battling for superior customer base and assets to grow market share which has sent them on a trip of regional acquisitions.
The KCB deal came months after Equity Bank Group called off its plan to acquire four banking subsidiaries from Atlas Mara Limited in a move aimed at preserving its capital in the wake of the Covid-19 pandemic.
The parties had initiated talks in April last year, but the negotiations targeting Atlas Mara’s units in Rwanda, Zambia, Tanzania and Mozambique dragged on until the pandemic hit.
Equity Bank then acquired Belgian tycoon George Forrest’s 66.53 per cent stake in Banque Commerciale du Congo (BCDC) for Kes10.4 billion ($95 million).
The Kenyan lender had already bought 86 per cent shareholding of ProCredit Bank between 2015 and 2017 and renamed it Equity Bank Congo, and has now merged it with the new acquisition creating Equity Commercial Bank of Congo (Equity BCDC)—the biggest foreign bank in the Democratic Republic of Congo.