Bank of Uganda (BoU) has said Orient Bank is yet to brief it on a proposed sale of a 90 per cent of its stake to a Kenyan Bank.
A source in the supervision department, who ordinarily could be aware of the discussions, said Bank of Uganda was not privy to the proposed sale , noting the Central Bank had only read about the matter in the media.
The matter, he noted, was still a private discussion, which after the two parties had agreed, will be brought to the attention of the Central Bank.
Efforts to get a comment from Ms Charity Mugumya, the Bank of Uganda director for communication, were futile as several calls to her known mobile phone number went unanswered by press time.
However, the source, who preferred anonymity because he is not authorised to speak to the media, said it was too early to discuss the proposed acquisition.
Efforts to get a comment from Orient Bank also proved futile.
However, Kenyan bank, I&M Holdings, had early this week published a cautionary statement in which it notified its shareholders of plans to acquire a 90 percent stake in Orient Bank.
The statement indicated the acquisition would be valued at about Shs72b.
If the deal is successful, I&M will add to a growing list of Kenyan banks that have invested in Uganda.
Already, banks such as KCB Group, Equity Group, DTB Group and NCBA have established their presence in Uganda.
Orient Bank reported a net loss of Shs1.1b for the year ended December 31, 2019.
The bank’s major shareholders include its vice chairman and founder, Ketan Morjaria, who also holds a significant stake in Kenya’s Credit Bank.
I&M currently runs a corporate finance advisory business, I&M Burbidge Capital, in Uganda and acquisition of the bank will expand its operations in that market.
The move underscores I&M’s growing quest among Kenyan banks for a bigger presence in the region where uptake of financial services is lower than Kenya. However, it signal significant growth opportunities given that EAC member states have fewer banks compared to Kenya’s 39. There are 24 banks operating in Uganda