Nigeria bank gets 80% stake in Orient
Apr 28, 2009
ORIENT Bank on Monday announced a merger with a Nigerian bank, Bank PHB, in a move aimed at strengthening its market share and ability to meet customers’ needs.
By Ibrahim Kasita
and Stephen Ilungole
ORIENT Bank on Monday announced a merger with a Nigerian bank, Bank PHB, in a move aimed at strengthening its market share and ability to meet customers’ needs.
The bank’s name will not change for now even if Bank PHB took a 80% stake in the deal. The deal was sealed at a “completion board meeting†held at Orient Bank’s headquarters in Kampala. Bank PHB has a paid-up capital of $2b (about sh4.4 trillion) with more than three million customers.
Bank PHB did not disclose the price they paid for the bank but analysts say a price of three times the bank’s book value of sh23b would be fair, which would value the 80% stake at about sh56b judging by similar valuations of banks listed on the Uganda Securites Exchange.
Maxwell Ibeanusi, who has worked in various Nigerian banks, was appointed as the new managing director of Orient Bank of Uganda.
Michael Cook, the Orient Bank chairman, said Bank PHB’s decision to start with Uganda in its foray into East Africa was a vote of confidence in the Ugandan economy.
He was optimistic the deal would give Ugandans more value-added retail products tailored to meet their increasing needs and translate into more employment opportunities.
Francis Atuche, the Bank PHB group chief executive officer, revealed that the merger reflects its strategic intent to expand into the East African region after establishing presence in the West African countries of Liberia, Sierra Leone and Gambia.
“We are architects of value. We pursue commercial excellence in ways that create superior value for our customers through a wide range of products and services,†he said.
“This is the strategic advantage Orient Bank stands to benefit from this marriage with Bank PHB.†Atuche said when they started operations in 2000, they were ranked 81st out of the 91 banks that existed in Nigeria, adding that the position improved to 17th and is fifth today.
“We want to be among the top five banks in Uganda in five years. With determination and commitment, we will do it,†Atuche said. The merger coincides with Orient Bank’s plan to restructure its shareholding to comply with Bank of Uganda’s regulatory requirement before the 2011 deadline.
Since 2004, the bank has been holding discussions with investors and no deal had been concluded yet. Orient Bank Ltd started its operations in March 1993.
Since then, the bank has had strong profitability due to professional management and the prudent lending and investments policies. In its last audited financial report for the year ended December, 2008, Orient Bank posted a pre-tax profit of $5.6m (sh10.2b). It also has a deposit base of $95m (sh182.2b) and assets worth $123m (sh236b).
In November, 2002, Orient Bank outcompeted other banks in taking over a local bank, Trans Africa Bank Ltd, a positive landmark for that bank that propelled its fast growth.
The bank currently has nine branches in Kampala, Entebbe, Jinja, Gulu and Mbale and plans to open three other branches this year in Kampala, Arua and Lira.
Bank PHB closed its 2008 financial year with gross earnings at $837m from $305m in 2007. It registered $220m as pre-tax profit from $8.4m the previous financial year.
It has a closing deposit base of $6b, ranking among the top five in deposits in the Nigerian banking industry.
and Stephen Ilungole
ORIENT Bank on Monday announced a merger with a Nigerian bank, Bank PHB, in a move aimed at strengthening its market share and ability to meet customers’ needs.
The bank’s name will not change for now even if Bank PHB took a 80% stake in the deal. The deal was sealed at a “completion board meeting†held at Orient Bank’s headquarters in Kampala. Bank PHB has a paid-up capital of $2b (about sh4.4 trillion) with more than three million customers.
Bank PHB did not disclose the price they paid for the bank but analysts say a price of three times the bank’s book value of sh23b would be fair, which would value the 80% stake at about sh56b judging by similar valuations of banks listed on the Uganda Securites Exchange.
Maxwell Ibeanusi, who has worked in various Nigerian banks, was appointed as the new managing director of Orient Bank of Uganda.
Michael Cook, the Orient Bank chairman, said Bank PHB’s decision to start with Uganda in its foray into East Africa was a vote of confidence in the Ugandan economy.
He was optimistic the deal would give Ugandans more value-added retail products tailored to meet their increasing needs and translate into more employment opportunities.
Francis Atuche, the Bank PHB group chief executive officer, revealed that the merger reflects its strategic intent to expand into the East African region after establishing presence in the West African countries of Liberia, Sierra Leone and Gambia.
“We are architects of value. We pursue commercial excellence in ways that create superior value for our customers through a wide range of products and services,†he said.
“This is the strategic advantage Orient Bank stands to benefit from this marriage with Bank PHB.†Atuche said when they started operations in 2000, they were ranked 81st out of the 91 banks that existed in Nigeria, adding that the position improved to 17th and is fifth today.
“We want to be among the top five banks in Uganda in five years. With determination and commitment, we will do it,†Atuche said. The merger coincides with Orient Bank’s plan to restructure its shareholding to comply with Bank of Uganda’s regulatory requirement before the 2011 deadline.
Since 2004, the bank has been holding discussions with investors and no deal had been concluded yet. Orient Bank Ltd started its operations in March 1993.
Since then, the bank has had strong profitability due to professional management and the prudent lending and investments policies. In its last audited financial report for the year ended December, 2008, Orient Bank posted a pre-tax profit of $5.6m (sh10.2b). It also has a deposit base of $95m (sh182.2b) and assets worth $123m (sh236b).
In November, 2002, Orient Bank outcompeted other banks in taking over a local bank, Trans Africa Bank Ltd, a positive landmark for that bank that propelled its fast growth.
The bank currently has nine branches in Kampala, Entebbe, Jinja, Gulu and Mbale and plans to open three other branches this year in Kampala, Arua and Lira.
Bank PHB closed its 2008 financial year with gross earnings at $837m from $305m in 2007. It registered $220m as pre-tax profit from $8.4m the previous financial year.
It has a closing deposit base of $6b, ranking among the top five in deposits in the Nigerian banking industry.