I&M Bank acquires majority shares in BCR
Today, private equity firm Actis announced the sale of its 80 per cent shareholding in Banque Commercial du Rwanda (BCR) to Kenyan based bank I&M and development finance institutions, Proparco and DEG.
The buy out occurred yesterday and will see the popular commercial bank transform into a regional player. I&M has already established branches in Tanzania and Mauritius, and according to its Executive Director, Sarit S. Raja Shah, Rwanda was an obvious choice. “Rwanda is an attractive destination for investment and we at I&B are impressed with the government’s policies and vision for economic growth. We have a need and desire for regional expansion and Rwanda was our first stop.”
BCR was privatized in 2004, when Actis bought its 80 per cent share from the Rwandan government, which continues to own the remaining 20 per cent holding. For the past five years the financial institution has been named ‘Best Bank in Rwanda’ by Global Finance Magazine, has 15 branches across the country and a staff of over 250. BCR’s total assets are worth Rwf 92.9 billion as of December 31st, 2011.
BCR’s Bill Irwin will remain in his position as chairman of the board and BCR’s image and branding will remain the same. “The BCR brand is valuable and well respected in this country. It will be staying and the BCR corporate entity will remain as well,” Irwin said.
According to Managing Director of BCR, Sanjeev Anand, the merger is the natural next step in BCR’s journey to becoming a leading East African financial institution. “For our clients, I believe this will elevate the quality of our products and services.”
Established in 1974 as a community financial institution, I&M has since grown into a commercial bank, with a presence in three countries, a work force of over 860 staff, and 19 branches in Kenya alone. The bank has a profit before tax of US $58.3 million and is ranked 6th by the 2011 Banking Survey out of Kenya’s 43 banks.
The Governor of the Rwanda Central Bank Claver Gatete was present for the announcement and shared the government’s stern approach to the buy out. “Before the government could engage I&M, they did their research to discover who I&M was for the protection of Rwandan shareholders.” From this research, it was established that I&M was a credible bank that would bring important change to the Rwandan banking sector.
According to Michael Turner, Managing Director for Actis–East Africa, the private firm’s exit from BCR does not signal financial trouble. “This deal signals a considerable endorsement for BCR and an important position in the regional market place.”
Turner added that Actis, as an investment group, often sells its shareholdings in most of the ventures it undertakes after a ten-year cycle. However, the sale of the investment group’s shares in BCR has come only eight years after the investment was made.