KCB Rwanda Plc and Banque Populaire du Rwanda Plc (BPR) have commenced a process of merging into one entity to be named BPR Bank, officials at the lender have said.
This follows an announcement by KCB Group, the parent company that they had concluded the acquisition of majority stake in BPR as of August 25.
KCB Group initially set out to acquire 62.06 per cent stake of BPR Plc owned by Atlas Mara Group and later in February acquired 14.61 per cent of the issued share capital of BPR held by Arise B.V.
This made KCB Group the majority owner with 76.67 per cent. KCB had earlier this year made an offer to buy out all remaining shareholders to fully own the bank.
"We are pleased to announce that having successfully secured the necessary regulatory approvals and consents, and fulfilled all other agreed closing conditions, both transactions were completed, with KCB having assumed majority ownership and control for the operations of BPR effective on August 25, 2021,” a joint statement by the two banks noted.
When the merger is complete, the combined bank becoming the second largest bank in the local market with regard to assets and market share and the most expansive branch network.
"We are delighted to complete this acquisition of BPR, a strong retail and SME bank with the largest branch network in the sector and a long history spanning over 45 years in the country. This transaction will see the combined bank becoming the 2nd largest bank in the industry,” KCB Group CEO and MD Joshua Oigara said.
According to officials, the merger is expected to enable KCB Rwanda customers access to a larger network of branches and agents across the country, while BPR customers will benefit from KCB’s progress in digital capability, transactional banking solutions, trade finance expertise and international banking.
"This will increase our scale and improve our operating leverage by enabling us to deliver our existing retail and wholesale offerings to a wider base of customers in Rwanda while positioning the bank for sustainable growth in the long-term,” Oigara added.
BPR Managing Director Maurice Toroitich said that from the transaction and transition, clients will benefit from being part of a large banking group in East Africa, KCB’s digital banking capabilities, complementary branch and agent network, innovative product offering among others.
The merged entity, he said, will look into deepening financial inclusion as well as lending and trade finance solutions to entrepreneurs and SMEs in the country.
"I want to reassure our clients that the safety of their accounts, the stability of banking operations and high-quality customer service will remain the top priorities for the combined institution during the transition,” Toroitich said.
The BPR was established in 1975 as a community based savings and credit scheme and subsequently transformed to become a fully-fledged commercial bank in 2008 with core focus on retail and SMEs.
In 2016 merged BPR with the commercial wing of the Development Bank of Rwanda (BRD), which it had acquired in 2014 giving Atlas Mara the controlling stake of 62.1 per cent of shares in BPR.
KCB Group on the other hand is arguably East Africa’s largest commercial Bank established in 1896 in Kenya. Over the years, the Bank has spread to Tanzania, South Sudan, Uganda, Rwanda and Burundi.