GTBank to Acquire 70% Stake in Kenyan Bank

Guaranty Trust Bank Plc (GTBank)  Thursday said it had reached an agreement to acquire a 70 per cent stake in Kenya's Fina Bank Limited for $100 million.

However, the agreement is subject to customary regulatory approvals in Kenya, Nigeria, Rwanda and Uganda.

Headquartered in Kenya, Fina Bank also operate in Rwanda through its 92 per cent owned subsidiary Fina Bank Rwanda Limited and in Uganda through its fully owned subsidiary Fina Bank (Uganda) Limited.

Based on its unaudited consolidated financials as of March 31, 2013, Fina Bank had total assets of $338 million, gross customer loans of $184 million and customer deposits of $285 million. The Group currently operates through 38 branches and employs 550 people across the three countries.

A document obtained by source said GTBank would acquire the 70 per cent shareholding in the bank “through a combination of capital injection in Fina Bank, and an acquisition of shares from the current shareholders. The total consideration to be paid by GTBank is estimated at around $100 million and is subject to closing adjustments and exchange rate movements.”

The statement said: “Furthermore, GTBank and the remaining shareholders of Fina Bank will enter into a shareholders’ agreement to ensure a smooth transition of the governance and operations of the bank, with the possibility of acquiring further shares in due course. The remaining shareholders of Fina Bank include its founder and current Chairman, Mr. Dhanu Chandaria.

“The parties will enter into this agreement in the spirit of a close partnership, as they share common objectives, and see significant benefits and synergies for both institutions and their respective stakeholders resulting from the transaction.”

The statement added that customers and employees of Fina Bank and its subsidiaries would benefit from the extensive and successful expertise of GTBank, especially in business and corporate banking, enhancing the range of products and services on offer as well as the skills and know-how of the employees.

“GTBank will enter East Africa through a multi-country and scalable platform, thus expanding its international presence in Sub-Saharan Africa. This transaction is being pursued consistently with GTBank’s disciplined and profitable track-record in its external growth strategy, with the ultimate objective of creating value for its shareholders via synergies and sharing of best-in class expertise,” it assured customers.

The shares and GDRs of GTBank are listed on the Nigerian Stock Exchange and on the London Stock Exchange, respectively.

GTBank shares, which had gained 13 per cent since this year, inched up 1.66 per cent to N26.40 per share on yesterday, as it total market capitalisation stood at N776.983 billion.

July 19, 2013