Imperial Bank to get Sh374m from sale of Uganda subsidiary

Tuesday March 8 2016

By OTIATO GUGUYU
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Imperial Bank of Kenya will get half of its share value from the sale of its Uganda subsidiary on deduction of transaction costs and interbank deposits.

The Ugandan subsidiary was sold on Monday to Tanzania’ Exim Bank which quickly renamed it to Uganda Exim Bank.

Imperial Bank which is under receivership of the Central bank of Kenya (CBK) and Kenya Deposit Insurance Corporation (KDIC) will now get Sh374.4 million from the sale.

“The shares in Imperial Bank (Uganda) Limited were sold to Exim Bank (Uganda) Limited for the sum of Sh689.6 ($6.788 million) in an effort to quickly recover funds for the benefit of all IBL depositors,” CBK said.

Net of interbank deposits and other transaction costs, the amount due to KDIC is Sh374.4 million ($3.685 million) the regulator added.

This will significantly be an erosion of the bank’s investment in Uganda which was at Sh858 million in 2014 when the subsidiary had Sh7.9 billion in total assets.
Imperial Bank Kenya held 58.6 per cent stake in the subsidiary from a previous 63.5 per cent after it sold 36,262 shares to minority shareholders.
The shares have now been sold to the Exim Bank and to the Export Finance Limited (4.9pc) at an undisclosed price.
Mukwano Group still holds a 36.5 per cent stake in the new Exim Bank Uganda under the name ‘Amazal Holdings.’

The Tanzanian Bank which has 23 branches as well as subsidiaries in Comoros and Djibouti will now have an established footing in Uganda.

Imperial Bank was a small player in Ugandan banking which was taken over after Kenyan authorities assumed management of the parent institution headquartered in Nairobi.

The Bank of Uganda took over management of Imperial Bank Uganda concurrently with its Kenyan counterpart in October last year through a coordinated effort.

CBK said they have been working together to find a solution to offset the shareholding and stated it supported the recent sale.