Imperial Bank to get Shs12b in sale of Uganda subsidiary
Imperial Bank to get Shs12b in sale of Uganda subsidiary
What you need to know:
Imperial Bank Uganda was placed under receivership in October last year.
KAMPALA. The collapsed Imperial Bank Kenya is set to receive about $3.7m (Shs12b) following the sale of its majority stake in Imperial Bank Uganda to Tanzania’s Exim Bank.
The Central Bank of Kenya (CBK) on Tuesday disclosed that Imperial Bank Kenya’s 58.6 per cent stake in its Ugandan subsidiary was sold to Exim Bank for $6.8 million (Shs23b).
The KSh316.5m (Shs10b) balance between the sale price and the amount to be remitted to the Kenyan unit will be used to cover transaction costs and liabilities of the Ugandan operation.
The Kenya Deposit Insurance Corporation, the receiver manager of the collapsed Imperial Bank Kenya, will receive the amount.
“CBK is very supportive of BoU’s actions, exercising its statutory powers as the regulator in that jurisdiction and seeking an outcome that does not jeopardise financial sector stability,” the regulator said in a statement.
“These shares in Imperial Bank (Uganda) Limited were sold to Exim Bank (Uganda) Limited for the sum of $6.8 million in an effort to quickly recover funds for the benefit of all IBL depositors.”
Exim Bank, one of the largest banks in Tanzania that also has subsidiaries in Djibouti and the Union of Comoros, appears to have acquired the stake at a considerable bargain.
Imperial Bank Uganda was set up in 2010 at a cost of KSh448m (Shs15b).
It had grown to a network of six branches.
The lender valued its investment in the subsidiary at KSh858m (Shs28b) at the end of 2014, when its gross assets stood at KSh7.9b (Shs261b).
BoU placed Imperial Bank Uganda under receivership last year, following a similar action on the parent company by the CBK as accounts of fraud at the lender surfaced.
Exim bank enters
BoU governor Emmanuel Tumusiime-Mutebile, on Monday, announced that the institution had terminated the statutory management of the bank following the transaction, whose value they did not disclose.
He also said the bank had consequently assumed the new name of Exim Bank (Uganda) whose operations, he said, would continue normally.
