Barclays concludes Nile Bank buyout agreement

Feb 04, 2007

BARCLAYS Bank and Nile Bank on Thursday finally signed an agreement, sealing off a takeover deal.

By Paul Busharizi

BARCLAYS Bank and Nile Bank on Thursday finally signed an agreement, sealing off a takeover deal.

“We signed the deal today (Thursday).

“We only await regulatory approval,” Barclays Bank managing director, Nick Mbuvi, revealed on Thursday night.

The takeover will see the UK-based bank acquire a 100% stake in Nile Bank and add its 25 (Nile’s) branches to Barclays’ existing seven.

Barclays will also takeover the customer base, creating 25 branches and 400 employees.

Mbuvi declined to disclose the financial details of the settlement but banking industry experts said sh29b or 2.5 times Nile’s sh11.7b net asset value would be a good estimate of the sale price. Barclays Bank Uganda’s net asset value was sh56b by the end of last year with customer deposits amounting to sh255.7b.

This is more than three times Nile Bank’s sh77b. Nile Bank’s assets amount to shl35b with revenues standing at shl9b.

Nile Bank’s planned share sale through an Initial Public Offer (IPO) by the end of last year was scuttled by Barclay’s takeover deal.

The IPO would have been the first in the market for purposes of purely raising capital.

The acquisition of Nile Bank is a departure of the high street bank strategy which Barclays until last year’s opening of the Mbale branch had chosen to concentrate its business in the capital Kampala.

Last year, Barclays PLC acquired South African retail giant ABSA when it returned to the South African market after about 20 years in a new move aimed to boost its presence in Africa.

As part of the deal, Barclays would take control of ABSA South African business but ABSA would take over the rest of their branches on the continent.


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