Orient Bank head offices in Kampala
Orient Bank is optimisticthat the proposed acquisition by 1&M Holdings PLCwill enable its customers to benefit from the synergies through the group’s regional infrastructure.
In a telephone interview, Orient Bank Communications Manager, Ms. Ronnie Zalwango said that the completion of the acquisition process will present a big opportunity for Orient Bank and its customers.
“The proposed acquisition will allow Orient Bank customers to benefit from synergies through the group’s regional infrastructure. This is indeed an opportunity for Orient Bank to become a leading player in Uganda’s banking industry,” Zalwango said.
On whether the bank will continue to operate normally, Zalwango said, “the bank will continue to operate as usual while the process of obtaining regulatory approval is ongoing.”
Orient Bank issued an update statement on their sale agreement with I&M Holdings PLC. The two parties entered into an agreement for I&M to buy 90% of the issued share capital in Orient Bank.
The transaction is however subject to conditions including regulatory approval from the Central Bank of Kenya, Bank of Uganda and Capital Markets Authority of Kenya.
The remaining 10% shareholding shall remain with the Founders’ Consortium namely; Dr. Ketan Morjaria and Mr. Alemayehu Fisseha.
Subject to receipt of regulatory approval, Dr. Morjaria will be continuing on as a Board Member of OBL and continue to provide strategic guidance and oversight to the institution.
I&M Holdings PLC is part of the I&M Group, which has interests in Banking, Insurance, Manufacturing and Real Estate and is listed on the Nairobi Securities Exchange.
As at March 2020, its total assets were approximately USD 3.2 billion. Based on the share price as at March 2020, the company’s market capitalisation was approximately USD 400 million.
I&M Bank in Kenya, is the flagship entity for I&M Holdings Plc. I&M Bank is a commercial bank that was incorporated in 1974. It is a dominant player in the Kenyan market and was the first bank in East and Central Africa to be licensed by VISA as an e-commerce acquirer.
Orient Bank launched its services in Uganda in 1993 and has over 20 branches spread across the country.
In 2002, the bank won a bid and took over Trans-Africa Bank Limited which had been declared insolvent by Bank of Uganda. This is not the first time Orient Bank is going through an acquisition process.
In 2015, the London-headquartered private equity fund 8 Miles, founded by musician Bob Geldof, acquired a 42 percent stake in Orient Bank.
In 2019, the bank registered a loss of UGX1.05 billion from a UGX5.5 billion profit registered in 2018.
Its assets grew to UGX814 billion in 2019 from UGX749 billion in 2018, according to published financial results.
In the recent years, acquisition and mergers in the banking industry have become a norm with the most recent ones being the merger of Commercial Bank of Africa (CBA) with NC Bank and the acquisition of Barclays Africa by Absa.
The above merger means that Uganda now has 25 commercial banks.
Uganda’s banking industry assets grew to Shs32.83 trillion in 2019, up from Shs28.3 trillion recorded in 2018, according to 2019 financial results.
The Orient bank acquisition and the merger of Commercial Bank of Africa (CBA) with NC Bank mean that the once smaller banks are set to compete with giants considering the fact that their parent companies back home in Kenya have a strong financial muscle and market share.