#COVID-19 pandemic is the main culprit that has served to rip apart the planned merger of Equity Bank Rwanda and BPR.
The highly anticipated merger deal between Equity Bank Rwanda and BPR was in the works for the last two years.
In the collapsed deal, Equity Bank Rwanda was on course to merge with Atlas Mara BPR.
Equity Bank Rwanda would have emerged a bigger player in the market with assets in excess of US$450 million. That would have made it the second-largest commercial bank in terms of assets over taking I&M Bank Rwanda the former BCR that currently has US$233 million in assets.
The third major implication is that the consolidated Equity Bank Rwanda would emerge as a brand with the largest branch footprint in Rwanda overtaking market leader Bank of Kigali (BK).
The announcement terminating the merger was announced by Equity Bank Rwanda’s parent company- leading Kenyan lender Equity Group in a statement on Monday, June 22, by the firm’s executive director Mary Wangari Wamae.
“After careful consideration, Equity Group and Atlas Mara have mutually agreed to discontinue discussions on the proposed transaction or a variant of it for the foreseeable future,” the statement reads in part.
Hannington Namara CEO of Equity Bank Rwanda in a brief statement to Taarifa said: “The deal with Atlas Mara is officially off. We are looking at other opportunities.”
The termination of the consolidation deal was eagerly awaited by the industry’s top captains and stakeholders as it was meant to intensify competition in the sector in a number of ways.
BPR owned by Atlas Mara Group is Rwanda’s largest bank in terms of its 200 bank network with over 100 ATMs. It employs over 100 staff giving it the most significant footprint in the local commercial banking sector.
It is worth noting that BPR was overtaken by BK in the banking sector realignments that took place in the last 10 years.
BK’s presence in the market stands at more than 79 branches, 100 ATMs, and more than 1,400 agents, 06 mobile vans, and over 1200 staff.
Part of major reforms happening within Rwanda’s banking sector is the need by licensed operators in the next five years to significantly increase core capital to US$21 million from US$5 million.
This is what partly informed the collapsed merger deal.
The local banking sector without a doubt is one of the most vibrant in the Rwandan economy.
The Finscope survey states that opportunities in the local banking sector are still vast. Out of more than four million adult Rwandans, less than 1.5 million use banking services with less than 100,000 Rwandans exclusively relying on commercial banks to do business.