Kenya’s Commercial Bank of Africa (CBA) has officially acquired Crane Bank Rwanda for an undisclosed amount.
The deal, which was closed on Wednesday and made public yesterday, saw 100 per cent stake of Crane Bank Rwanda Ltd acquired from Uganda’s Dfcu Bank.
The deal is, however, subject to regulatory approval by National Bank of Rwanda, Bank of Uganda (BoU) and Central Bank of Kenya (CBK) as well as relevant capital market regulatory authorities.
In a statement, Isaac Awuondo, the CBA group managing director, said the move reflects their plan to expand further into the Rwandan market as they continue to penetrate the region.
“The acquisition signals CBA’s strategic intentions to expand its existing business operations in Rwanda and participate meaningfully in Rwanda’s economic growth agenda by providing the full spectrum of financial services to this market,” he said.
The capitalisation challenges at Crane Bank Uganda and consequent takeover of the management by Uganda’s central bank did not have direct effect on its Rwandan subsidiary, according to officials at the National Bank of Rwanda.
CBA entered the Rwandan market in January operating as a micro-finance institution.
The bank partnered with telecom service provider MTN-Rwanda to roll out a mobile telephone-linked banking product, MoKash.
According to Derrick Ouma, a top official at CBA, the bank will run their two entities separately for the time being until the completion of the post-acquisition processes.
He said the two banks will be under the parent company based in Nairobi, Kenya.
In regards to the branding, he said the new asset would keep its name for the time being but there are chances of a merger in future.
CBA Rwanda is registered as a micro-finance bank and will remain so for the time being, according to officials.
Commenting on the implication of the acquisition to staff of the bank, Ouma said they will not be affected at the moment considering that the bank was still operational.
However, as the new owners restructure the bank, he added, there was a chance of normal staff restructuring.
The acquisition by CBA could see Crane Bank Rwanda adopt technology in its expansion and penetration of the Rwandan market. This is due to the fact that the new owner has largely been dependent on technology for growth and expansion.
CBA Group has a total asset base of $2.2 billion, loans worth $1.1 billion, deposits worth $1.8 billion and shareholders’ funds totaling $300 million as at December 31, 2016.
The bank’s mobile savings and loans serves over 27 million customers within East Africa in partnership with mobile money operators.
Prior to the acquisition, a number of local banks had expressed interest in Crane Bank Rwanda, which has two branches in the country.
The bank began operations in the country in 2014.