Stanbic Takes Over UCB

By Yunusu AbbeySouth Africa’s Standard Investment Banking Corporation (Stanbic) took over Uganda Commercial Bank (UCB) management yesterday after concluding the deal with the Bank of Uganda (BOU).Stanbic, which offered US$19.5m for 80% shares in UCB, sealed the transaction with the central bank, ending the long-awaited sale of the state-owned bank.Stanbic, said to be one of Africa’s leading banks, accepted to retain all the current UCB general managers until further notice. Emmanuel Tumusiime-Mutebile, the BOU governor, said the central bank lifted its statutory management of UCB effective 5:00pm yesterday.“The managing director (Jayant Kumar) will be recalled and Stanbic will provide a new managing director who will start work tomorrow,” Mutebile said. Kumar, an expatriate, has been the UCB chief executive since April 8, 1999 when BOU took over the bank after terminating Westmont’s contract.“It was agreed that until further notice, all the current general managers in UCB will stay. It was also agreed that over the next two years, Stanbic will terminate the services of up to 500 employees,” Mutebile said. UCB has 1,200 employees. Mutebile added, “The Government has made arrangements to pay all the retrenchment packages as soon as their employment is terminated.“I am very satisfied with this transaction. We have always insisted that the process was being conducted in a transparent manner. We had all the legal backing to transact the business. Our two main objectives have been fulfiled,” Mutebile said.To critics and those who had been opposed to the UCB sale, Mutebile, who was addressing a press conference at BOU, said, “Let God bless them,” causing laughter.He said within the next few weeks, UCB and Stanbic would merge to form one strong bank. “The combined assets will make the bank worth US$378 and the equity will total US$47m,” he added.Mutebile said this was a very complicated transaction to negotiate. “I can assure you all the time it took was very much worth it. The transaction was fair to both Uganda and the Stanbic investors,” he said.He disclosed that it was agreed that Stanbic would, for a period of two years, retain all the 68 UCB branches in the country.Simphiwe Tshabalala, Stanbic Africa’s managing director, said in a statement faxed to The New Vision, “our existing operation has been very successful in Uganda’s niche corporate segment.UCBL provides us with an opportunity to take a significant step forward into the broader market.”“When the two operations merge, we anticipate deriving benefits through transactional, trading, funding and lending channels. We’ll use the retail banking expertise of our South African based operations as a spring board to provide Ugandan clients with a diversified product,” he said.Ends