Foreign investment in Rwandan banks, welcome

The 24th Annual General Meeting of the African Export-Import Bank (Afreximbank) closed in Kigali yesterday after a week of activities; it attracted dozens of international business journalists one of whom I had a conversation with and is the inspiration behind this commentary.

The 24th Annual General Meeting of the African Export-Import Bank (Afreximbank) closed in Kigali yesterday after a week of activities; it attracted dozens of international business journalists one of whom I had a conversation with and is the inspiration behind this commentary.

The journalist, an editor in chief for Finance with a respected France based publication was partly here to gather content for an upcoming journal about Africa’s 200 largest banks and he wanted my insight into recent developments in Rwanda’s banking sector.


Among his points of curiosity was ongoing talk of impending buy-ins and acquisitions.


“Let us take a walk,” I told him.


I walked him to the summit of the Car Free Zone (CFZ), a street on a plateau located at the heart of Kigali. “This, right here is Rwanda’s financial capital,” I remarked.

“It’s like our Wall Street; home to our entire banking sector,” I added.

He exclaimed, merrily; “Wow, I love it here. I have traveled most of Africa and I haven’t seen many Car Free Zones.”

It was just after 11am and the street was alive with human activity. We were standing outside a corner building adjacent École Belge and opposite Cogebank building.

“That building under construction is for Cogebank, the fourth largest of eleven commercial banks, by total assets, net-loans and equity with a market share of 9.2, 9.8 and 8.2 percent, respectively, as of the first quarter of this year,” I said.

“Eleven not twelve banks?” he asked.

I answered as we walked down the carless street, “Yes, eleven, at the moment, following the acquisition of Crane Bank Rwanda by Bank of Africa.”

He probed; “And Cogebank was acquired by a Moroccan Bank, right?”

Yes. Last October, Attijariwafa, a Moroccan bank reached an understanding to buy 75 percent stake in Cogebank, during the Moroccan King’s state visit to Rwanda; Attijariwafa chief executive Mohammed Kettani was part of the Monarch’s delegation.

But coverage of the deal by the press lacked analysis; the reporting for instance failed to explain how Attijariwafa secured a 75 percent majority stake at a reported figure of US$41million. Was the bank struggling?

Also, no one has written about what the deal means for the future of the brand Cogebank which has sponsored popular annual events such as Tour Rwanda (Cycling) and the Miss Rwanda Pageant; with a 75 percent stake, Cogebank could become Attijariwafa as the case elsewhere.

We had reached Kenya Commercial Bank. An elderly man was explaining to a security guard that the Automated Teller Machine had swallowed his debit card.

“KCB Rwanda another bank with foreign backing, is currently fifth largest bank by net loans and customer deposits, at 8.5 and 9.4 percent, respectively and sixth largest in total assets with a market share of 7.6 percent as of end of March 2017.”

Despite KCB Rwanda’s unimposing market share, as a group, it has a commanding presence in Kenya with total assets worth an estimated US$6bn.

“You could say the bank is still finding its foothold in Kigali, having made an entrance only nine years ago,” I explained adding that the same could be said of Equity Bank, another Kenyan backed lender, located just next to EcoBank Rwanda, another foreign brand.

Equity Bank’s story here begun in 2011 and in seven years, it’s ranked fifth on equity, sixth on net loans and seventh on both total assets and customer deposits, as of end of March.

From where we stood, we could see I &M bank, the country’s 3rdlargest bank. It too, is foreign owned. Next to it is GT Bank, a Nigerian owned business and on the street yonder, BPR, an Atlas Mara backed bank.

We got to Bank of Kigali, which was reported this week as being courted by a foreign bank based in Morocco; it is a development that has, understandably, generated conversation.

Today, BK is not only Rwanda’s largest bank, it is also, the only purely, indigenous Rwandan brand; the bank which recently celebrated its fiftieth anniversary enjoys a commanding market share of over 30 percent across all key indices.

The journalist asked me whether Bank of Kigali will maintain its rather prestigious status as a purely Rwandan brand, if reports of a buy-in by the Moroccan bank materialize.

The press went into overdrive this week after Finance Minister Claver Gatete revealed during the Afreximbank opening press conference that negotiations were in final stages for Banque Centrale Populaire (BCP) to acquire a stake in BK.

On being asked, BK CEO Dr. Diane Karusisi confirmed that ‘BCP had expressed interest to acquire a stake in BK and that stakeholders were weighing options.’

Without a signed agreement, the deal is mere conjecture. However, commenting from a historical perspective of the buyer in question; BCP is known to be a growth focused investor whose strategy favors preserving local brands while quietly availing capital to finance more investment.

Capital, is what all Rwandan banks need; to lend more and fuel the country’s credit hungry private sector investment; options to raise that capital, especially for listed banks may include regional, continental or even international cross-listing but for BK, the Moroccan investors present yet another option. The Rwandan borrower will be the ultimate winner.

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