Bank of Uganda offloads Imperial shareholding to Exim Tanzania

The Bank of Uganda (BoU) has offloaded a majority stake held in Imperial Bank of Uganda, effectively ending its statutory management of the bank.

The Ugandan banking regulator sold the 58.6 percent stake previously held by Imperial Bank Kenya to Tanzania’s Exim bank that plans to rebrand the bank and resume operations.

“BoU congratulates Exim Bank (Uganda) Ltd, the new majority shareholders, & the old minority shareholders, the customers and clients, on this significant milestone that will certainly make the bank stronger,” BoU Governor Prof Emmanuel Tumusiime-Mutebile said in a statement.

The Central Bank of Kenya placed Imperial Bank under receivership in October 2015 after the unearthing of a Sh38 billion fraud scheme at the bank. The Bank of Uganda however opted to put the Ugandan subsidiary under statutory management and immediately begun the search for a buyer for the majority stake.

The bank of Uganda put up the shares for sale in October with Exim bank now venturing into the Ugandan market.

“BoU would like to inform the customers of Exim Bank (UG) Ltd, formerly Imperial Bank (UG) Ltd, & the public that the operations & services of Exim Bank (UG) Ltd shall continue normally,” BoU governor said in a statement.

The sale of the Ugandan subsidiary leaves imperial bank shareholders in a tight spot, with the CBK effectively managing its affairs. In December the regulator took the decision to pay customers up to Sh1 million of their deposits held in the bank. CBK and the Kenya Deposit Insurance Corporation (KDIC) brought on board Kenya Commercial Bank and DTB to handle the repayments to customers.

Efforts by Imperial Bank shareholders to get the bank re-opened have however faced headwind.

Shareholders had proposed to inject Sh10 billion into the bank, recover assets from recipients of the fraudulent money as well as bringing on board a strategic investor. The CBK has expressed its opposition to the proposal of a strategic investor.

CBK Governor Dr. Patrick Njoroge, howeve,r says the regulator remains open to talks.

“If we re-open it (Imperial Bank) it has to be re opened to stay open. We shouldn’t be in the business of re opening banks for a temporary amount of time then being forced to close it,” CBK Governor Dr. Njoroge said when being grilled by Parliamentary Finance Committee.

No value was attached to the transaction, but imperial bank shareholders had hoped to raise Sh1.3 billion from the sale of the Ugandan business.