Bank of Uganda is not aware of Crane Bank’s planned merger, and has not approved a sale of the bank, according to Benedict Sekabira, the director commercial banking at Bank of Uganda.
Mr Sekabira told Uganda Business News that the central bank, in its role as regulator, would have to clear the bank’s merger or sale. The deal has not come before the central bank, however, he said.
Mr Sekabira spoke to Uganda Business News at the sidelines of a Bank of Uganda sensitisation workshop for Members of Parliament held in Kampala today.
Crane Bank was on Thursday forced to deny rumours that it is up for sale, saying instead that it is merging with a “strategic equity investor.” Press reports said the bank “has seen over 70% of its shares transferred and/or sold to South African investors.” The sale, according to the report, was due to the bank’s “poor performance.”
However, the bank denied the claims in a press statement. The statement said the bank is a “strong and sound financial institution,” and has been looking for a “strategic equity investor” for the last two years.
Uganda Business News understands that talk of a sale was most likely sparked by due diligence from the entity the bank is seeking to merge with. The due diligence process involves a “detailed check of the financial and operational status of an acquisition target, supplier, or other potential business partner before a deal is finalised.”
The process would have required representatives of the buyer carrying out exhaustive examinations of all aspects of Crane Bank’s business, an undertaking that would have been impossible to keep under wraps.
Crane Bank officials declined to reveal the identity of the investor the bank is in negotiations with.
Crane Bank is owned by businessman Sudhir Ruparelia. It is Uganda’s fourth largest bank by assets, and is classified as a “domestic systemically important bank” by the central bank.