Tanzanias fifth largest bank by assets, Exim Bank, has been launched in Uganda. The bank, trading as Exim Bank Uganda, was officially launched last evening by Governor of the Bank of Uganda Emmanuel Tumusiime-Mutebile at Serena Hotel in Kampala.
Mutebile, who described the bank's entry as a fantastic opportunity, said the decision by Exim Bank Tanzania to invest in Uganda is tremendous, adding that that he is confident the bank will prove in years ahead to be of benefit to Uganda.
Mutebile said from Exim Bank's history in Tanzania and Comoros he has "no doubt that we are opening a fantastic opportunity in Uganda's banking industry". Exim Bank was the first Tanzanian bank to establish a footprint overseas with fully-owned subsidiaries in Comoros, followed by Djibouti and now Uganda.
Tanzania has 55 banks. Exim Bank Uganda bought majority shareholding in former Imperial Bank Uganda which the Bank of Uganda placed under statutory management in October last year following the closure of its parent, Imperial bank Kenya. Mutebile emphasized that Imperial Bank Uganda, unlike its Kenyan parent, was not suffering from any financial stress.
He said the statutory management arose from the need to protect the depositors' money and not because the problems in Kenya or anything else happening in Uganda. The Governor explained that in order to ensure continuity of Imperial Bank Uganda's operations the central bank decided to dissolve it by arranging for its sale to Exim Bank Tanzania.
Mutebile said they do not regret the decision at all because it has, as he put it, "introduced a new investor with big financial muscle and technical resources to manage the bank in a safe and sound manner". Accordingly on February 16, 2016, a share sale and purchase agreement was arrived at between Exim Bank Tanzania in respect of acquisition of 58.6 percent equity share in Imperial Bank Uganda from Imperial Bank Kenya.
Mutebile said the sale ended Bank of Uganda's statutory management of Imperial Bank Uganda leading to Exim Bank Tanzania's takeover and subsequent change of name to Imperial Bank Uganda on March 7, 2016. The other shareholders in Exim Bank Uganda are Mukwano Group, trading as Amazal Holdings Limited which holds 36.5 percent and Export Finance and Investment Limited with 4.9 percent.
Mutebile said the successful resolution of Imperial Bank Uganda achieved three important objectives - it ensured that depositors' funds were not lost; it enabled the bank to continue operating without any disruptions to customers; and it protected public confidence in the bank system and safety of depositors' savings.
The Governor said the move demonstrated that Uganda has bank resolution framework which is effective and works for the benefit of the Ugandan people.
Mutebile said the entry of Exim Bank in Uganda's financial sector and economy will have great dividends.
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Exim Bank Uganda operates five branches in Kampala with five others planned for this year and beyond.
Sarah Bagalaaliwo, the Chair of the Board of Directors of Exim Bank Uganda thanked the Bank of Uganda for its role in managing well the Imperial Bank Uganda situation.
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The bank's Managing Director, RR Chandramouli, said they have increased the bank's capitalization, pledging that they will play a key role in the economy.
Chandramouli also said the bank's entry comes at an opportune moment, including the decision on the crude oil pipeline from Hoima to Tanga in Tanzania.
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Exim Bank Tanzania was established in 1997 and now has 27 branches countrywide with 1.5 trillion Tanzanian Shillings in assets and shareholder fund of 200 billion Tanzanian Shillings. This means Exim Bank Tanzania is perhaps bigger than any bank in Uganda.
Among its many accolades, Exim Bank is listed among the top five retail banks in Africa and one of three sustainable banks of 2011.One uniqueness with Exim Bank, unlike nearly all Ugandan banks, is that it offers interest on current accounts.
In order to underpin the importance of Exim Bank's entry in Uganda's financial sector, the tops guns at Bank of Uganda attended the launch. In addition to the Governor, there was the Deputy Governor Louis Kasekende and the Executive Director for Supervision Justine Bagyend