10 May 2017

Rwanda: CBA Set to Acquire Crane Bank Rwanda

Photo: The New Times
Crane Bank in downtown Kigali.

Plans and procedures for acquisition of Crane Bank Rwanda by Commercial Bank of Africa (CBA) are at an advanced stage with the deal expected to be completed in coming days.

The sale of Crane Bank Rwanda comes months after the parent firm, Crane Bank, was sold to Dfcu Bank, both based in Uganda.

Sources privy to the issue told The New Times that the acquisition was initiated about a fortnight ago and could be complete any day from now.

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.

The source said there have been discussions on the acquisition, which are awaiting formal sign-off.

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.

CBA's acquisition of Crane Bank Rwanda could see it transition from a micro-finance facility to a fully-fledged financial institution and venture into retail banking.

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, officials from the National Bank of Rwanda say.

This is because foreign players do not open branches in Rwanda as they are expected to open fully-fledged banks.

To operate in the country, a micro-finance bank is supposed to have a minimal capital requirement of Rwf1.5 billion, while a fully-fledged bank requires Rwf5 billion.

However, this will not increase the number of banks in the country as CBA was already registered. There are currently 17 banks operating in the country with 194 branches and 174 sub-branches.

As of December 2016, total assets of the banking sector stood at Rwf2,378 billion up from Rwf2,133 billion in the previous year.

Asked about the development, central bank governor John Rwangombwa said they were awaiting official communication on the development from the seller.

He explained that the central bank is not usually involved in the negotiation and sale of a bank when it is not under receivership.

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