Kampala, Uganda | THE INDEPENDENT | Orient Bank management has said they agreed to sell majority shares of the bank to a Kenyan company which will facilitate its growth into a leading player in Uganda’s banking sector.
On Monday, it emerged that I&M Holdings Limited, the owners of I&M Bank Kenya, had reached an agreement with Orient Bank owners to buy 90 percent of the bank. The transaction awaits approval from regulators in Kenya and Uganda.
In a statement on Thursday, Orient bank management which is led by managing director Kumaran Pather said: “The proposed transaction is entered into as part of the Bank’s growth strategy and growth aimed at becoming a leading player in Uganda’s banking industry and part of a strong and growing regional banking group.”
The remaining 10 percent shareholding shall be held by Dr Kentan Morjaria, the bank founding member and Alernayehu Fisseha, the proprietor of General Supplies Limited who has been owning 4.5% of the bank.
Dr Morjaria’s family has been owning 49% while London-headquartered private equity fund 8 miles, founded by musician Bob Geldof, bought a 42 percent stake in Orient Bank (U) Ltd in 2015. Geldof is exiting after five years.
I&M Holdings is part of I&M group which comprises of banking entities in Kenya, Tanzania, Mauritius, and Rwanda.
I&M Holdings, which is listed on the Nairobi stock exchange said on Monday that the acquisition of the bank is now subject to several conditions including regulatory and corporate approvals including those from the central bank of Kenya, Bank of Uganda, Capital Markets Authority and shareholders of the company in general meeting.
Orient Bank Limited launched its services in Uganda in 1993. In 1996, Orient bank opened a branch in Jinja, the first outside Kampala. The bank then acquired Trans-Africa Bank Limited in 2002, which had been declared insolvent by Bank of Uganda.
In 2019, the bank struggled to make money turning in a loss of 1 billion Uganda Shillings from a 5.6 billion Shillings profit registered in 2018. Its assets grew to 814 billion Shillings in 2019 from 749 billion Shillings in 2018, according to published financial results.