CBK receives Sh374m from Imperial Bank UG sale
The central Bank of Kenya is set to receive Sh374 million following the sale of Imperial Bank Uganda’s 58.6 percent stake to Exim Bank Tanzania by the Bank of Uganda.
In a statement the CBK revealed that the transaction was valued at Sh689 million, with the regulator netting off interbank deposits and other transaction costs that it did not expound on.
A turnaround strategy report prepared for Imperial Bank shareholders by FTI consulting had expected to raise Sh1.3 billion from the sale of the Ugandan business.
The sale of shares held by Imperial Bank Limited (IBL) effectively ended the Ugandan regulator’s statutory management of the bank, with Exim bank set to rebrand and reopen the bank in due course.
Imperial Bank was placed under receivership on October 13th 2015, after the unearthing of a Sh38 billion fraud scheme at the bank.
“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 jeopardize financial sector stability,” the regulator said in a statement.
Unlike the move by the Ugandan banking regulator, Central Bank placed imperial bank under receivership, effectively taking control of the bank and its affairs. Failure by shareholders and the regulators to agree on a recovery plan has seen the bank remain shut for the past five months. The lengthy delay has seen shareholders raise concern that liquidation appeared to be the only outcome.
The central bank however says it continues to work with all concerned parties to find a solution.
“In particular, work by forensic auditors and other investigative agencies is ongoing, with the objective of protecting the interests of IBL depositors, facilitating the quick recovery of funds and protecting the financial sector,” said the regulator.
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. This has however not gone down well with Imperial Bank shareholders.
“I verily believe that the pay-out of deposits of up to Ksh. 1 million through the Interested Parties who required as a condition precedent that each affected customer had to go through a rigmarole of opening new bank accounts with them, is calculated to destroy the Bank’s customer base by obliging them to effectively move their money into new accounts with the Interested Parties. This is in line with Respondent’s aim of liquidation of the Bank and is to the advantage of the Interested Parties, with whom the Respondents have an arrangement, Imperial Bank Director Anwar Hajee said in an affidavit filed on Tuesday.
The ultimate fate of Imperial Bank remains unclear, with the Central Bank yet to give concrete direction.
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