Banque Populaire du Rwanda Plc has reassured its clientele that it will not cease or halt business engagements despite the ongoing acquisition by KCB Group.
The two entities on Thursday morning announced the commencement of an acquisition of a 62.06 per cent stake in Banque Populaire du Rwanda Plc which is owned by Atlas Mara Group.
With the acquisition process underway, following definitive agreement, BPR has said that ongoing business engagements with clients and other parties will be maintained.
BPR Managing Director Maurice Toroitich said that the development will not disrupt or affect any of the current ongoing business at the bank including issuance of loans and credit facilities.
"We are continuing everything we have been doing. This is a merger of growth not of cutting. The intention is to create a bigger business and our customers can look forward to being part of a regional bank,” he said.
Toroitich happens to be the former Managing Director of KCB Bank Rwanda.
Regarding the fate of the BPR’s staff, suppliers and contractors, KCB Bank Rwanda George Odhiambo, said that the way forward will become clear after completion of the acquisition process.
However, considering that the two banks will merge into one entity with BPR being included in KCB Rwanda’s operations, staff and suppliers are likely to be maintained.
Bigger portfolio
KCB Bank Rwanda George Odhiambo said that the merger will see the bank ranked 2nd largest bank in the country, increasing scale and improving operating leverage to deliver existing retail and wholesale offerings.
As of June this year, KCB Rwanda’s total assets were valued at Rwf202.3bn while BPR’s were valued at Rwf374.8bn. At Rwf577bn, the new entity will be second largest in terms of assets trailing Bank of Kigali which has assets estimated at over $1 billion.
The acquisition comes at a time when local banks are gearing up for compliance with minimum capital requirements set by the Central Bank in 2018 raising their minimum capital from the current Rwf5bn to Rwf20bn. The transition period was set at 5 years.
Banks that did not meet the Frw20 billion capital requirement when it was passed were required to build up to Rwf15 billion in the next three years ending 2021.
Different banks have taken different approaches to avail the capital. For instance, I&M Bank Rwanda chose a Rights Issue presenting existing shareholders the opportunity to increase their stake in the Bank by buying 1 new share for every 5 ordinary shares.
Other lenders used up part of their assets while others are considering mergers and acquisitions to meet the capital requirements.
KCB Group intends to make an offer to the remaining shareholders of BPR to acquire additional shares from the remaining shareholders and will offer the same acquisition price applicable to the shares to be acquired from Atlas Mara Group, according to a statement from KCB Group.
BPR is the result of an investment of about $20.4 million (about Rwf15.4 billion) in Banque Populaire du Rwanda and a consequent merger with BRD Commercial Bank Ltd, previously part of Development Bank of Rwanda.
In April 2015, Atlas Mara Limited acquired minority shares in BPR and later 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.