Access Bank Plc (Access), one of Africa’s largest banking groups, is set to acquire Uganda’s Finance Trust Bank, highly-placed industry sources have told CEO East Africa Magazine.
Access Bank Plc, which has been on an acquisition spree on the African continent, according to our sources is “dotting the I’s and crossing the t’s as well as securing regulatory approval by both the Central Banks of Nigeria and Uganda” and the deal will be “announced soon”.
Finance Trust Bank was one of the banks that needed a significant capital boost, following the Central Bank of Uganda’s six-fold increment of capital buffers for financial institutions. On the 16th of November 2022, the Financial Institutions (Revision of Minimum Capital Requirements) Instrument 2022 was signed into law by Uganda’s Minister of Finance, Planning and Economic Development (MoFPED), Hon. Matia Kasaija. The instrument increased the minimum capital requirements for banks by 6 times or 500% from UGX25 billion (USD 6.7 million) to UGX150 billion (approx USD 40.2 million). The increment would however be tiered, starting with a minimum capital buffer of UGX120 billion (USD32.2 million) by the 31st of December 2022 and then UGX150 billion by the 30th of June 2024.
Commercial banks must also have minimum capital funds unimpaired by losses (core capital) of UGX 120 billion by 31 December 2022, and UGX150 billion by 30 June 2024.
Under the same statutory instrument, minimum capital requirements for credit institutions were also increased by 25 times or 1900% from UGX1 billion (USD268,000) to UGX25 billion (USD6.7 million) by 30th June 2024. Similarly, the increments are tiered, starting with a minimum capital buffer of at least UGX20 billion (USD5.4 million) by the end of December 2022.
Micro Deposit-taking Institutions (MDIs) were also required to increase their minimum capital to at least UGX8 billion by 31st December 2022 and UGX10 billion by June 2024.
As of the end of December 2022, Finance Trust Bank’s share capital was at UGX27.8 billion while minimum capital funds unimpaired by losses (core capital) was at just UGX60 billion.
Of the 25 banks in Uganda, as of the end of 2022, Finance Trust Bank was the 18th by assets (UGX441.3 billion), deposits (UGX276.8 billion); 14th by lending (UGX265.8 billion) and 16th by profits (UGX8.5 billion).
Efforts by the CEO East Africa Magazine to speak to Access Bank Plc’s Chuma Ajene, the Group Head of Strategic Investments as well as Amaechi Michael Okobi the Chief Communications Officer were futile as the duo did not respond to our emailed inquiries.
Annet Nakawunde Mulindwa the Chief Executive Officer of Finance Trust Bank was equally tightlipped about the matter. She refused to comment.
Putting women first
How Stanbic Bank CFO Ronald Makata Blends Governance, Technology and Human Leadership to Drive PerformanceFinance Trust Bank(FTB) started running as a Tier 1 Financial Institution on 11th November 2013 taking over the business of Uganda Finance Trust Limited, then an MDI. Finance Trust Bank was first registered as an NGO in 1984 as “Uganda Women’s Finance and Credit Trust Limited” which later changed its name to “Uganda Women’s Finance Trust Limited” in 1997. On 12th October 2005, Uganda Women’s Finance Trust Limited Limited was licensed as a Microfinance Deposit-taking Institution.
With its headquarters at TWED Plaza Lumumba Avenue, Finance Trust bank operates a network of 35 Branches, including one at Kalangala Islands. 70% of the bank’s branches are located in rural areas.
The bank currently serves over 500,000 savers and over 29,000 borrowers.
The Bank offers a broad range of financial solutions, including loans, deposit accounts, money transfer services, utility bills collection, and insurance services to small and medium-income people companies, SMEs, institutions, and net-worth individuals. Finance Trust Bank is also active in trade and finance and treasury services.
Finance Trust Bank has a varied ownership structure comprising of international and local shareholding. The shareholders are Uganda Women’s Trust (20.1%), Oiko Credit Ecumenical Development (19.6%), Progression Eastern African Micro Finance (18.3%), RIF North 1 of Mauritius (18.3%), Investment & Partner Afrique Entrepreneurs (14.2%) and Ugandan Women Entrepreneurs (9.5%).
Access Bank Plc has been on an acquisition spree on the African continent. Just this July, Access Bank Plc (Access) and Standard Chartered Bank entered into agreements for the acquisition of Standard Chartered’s shareholding in its subsidiaries in Angola, Cameroon, The Gambia, and Sierra Leone, and its Consumer, Private and Business Banking business in Tanzania. The payment consideration for this record transaction is yet to be revealed, pending the deal’s approval by Nigeria’s Central Bank.
Hinting at Access Bank’s pan-continental 5-year growth and expansion plan, Roosevelt Ogbonna, Group Managing Director, Access Bank Plc, said the deal represents a key step in Access Bank Plc’s journey to build a strong global franchise focused on serving as a gateway for payments, investment, and trade within Africa and between Africa and the rest of the world, anchored by a robust capital base; a relentless focus on execution; and best-in-class customer service & governance structures.
“With our recent European expansion and our deepened presence in key trading corridors across Africa, we will bridge the gap between cross-border and domestic transfers across all business segments,” Ogbonna added.
He said the bank seeks to be the World’s Most Respected African Bank in 5 years.
