dfcu Bank has shed the Crane Bank Rwanda assets and liabilities off its books, choosing to focus on the Ugandan market.
On Thursday, CBA Group issued a statement confirming that had been a rumour for over a month that it was acquiring Crane Bank Rwanda.
“Commercial Bank of Africa Limited (CBA) is pleased to announce that it has signed a definitive Sale and Purchase Agreement (SPA) to acquire 100 percent of Crane Bank Rwanda from dfcu Bank Limited (dfcu),” reads the notice issued by Mr Isaac Awuondo, the CBA Group Managing Director.
In January 2017, dfcu Bank acquired liabilities and assets of Crane Bank from Bank of Uganda (BoU) for an undisclosed fee. The acquisition included the Crane Bank Rwanda. It is understood that dfcu Bank did not have any interest in retaining the Crane Bank Rwanda assets on its books.
The majority shareholder of dfcu Bank, Arise B.V owns a 14.6 percent stake in Banque Populaire du Rwanda Ltd (BPR), which has 19 branches in the country. Crane Bank Rwanda had two branches in Rwanda in Kigali, the capital.
The amount CBA will pay remains undisclosed. CBA has operations in Rwanda, Kenya, Uganda, and Tanzania, and has a customer base of 27 million in East Africa mostly due to its micro-lending partnerships with Safaricom, MTN Uganda, MTN Rwanda and Vodacom Tanzania.
The Daily Monitor also understands that one of the reasons for the delay in disclosure of some details about the dfcu Bank rights issue at the AGM last week was because the Crane Bank Rwanda sell was still being negotiated.
“The transaction is subject to regulatory approval by National Bank of Rwanda (BNR), Bank of Uganda (BoU) and Central Bank of Kenya (CBK) as well as other relevant capital markets regulatory authorities,” reads the notice.
Dfcu Bank is expected to disclose details of its transactions around Crane Bank in a right issue prospectus at the end of this month.
Crane Bank Rwanda was the only Ugandan owned bank that had been operating in a foreign country. It was opened in 2014. The only other Ugandan owned bank to ever operate out of the Ugandan borders was Greenland Bank. It collapsed in 1999.
Mr Sudhir Ruperalia lost control of Crane Bank (a bank he started in the 1990’s) in October 2016. BoU took over its operations after a complete Shs220 billion capital wipe out; bringing an end to the questionable banking practices at what was Uganda’s third largest bank. On January 27, 2017, Crane Bank assets and liabilities were sold to dfcu Bank.
Dfcu Bank has since borrowed Shs180 billion from its largest shareholder to shore up its capital to meet BoU requirements.
An audit on Crane Bank also declared the former Crane Bank shareholders not to be “fit and proper” to own and operate a bank. This effectively meant that Crane Bank Rwanda could not stay in the hands of Mr Ruperalia.