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Pan-African banking group, United Bank for Africa (UBA) says it has acquired more stakes in its Kenyan and Ugandan subsidiaries in the wake of a rush by Nigerian lenders to penetrate the East African banking market now under the control of Kenyan retail banks.
The Nigerian billionaire Tony Elumelu-owned lender acquired 13 percent and 11 percent additional shares in UBA Kenya Ltd and UBA Uganda Ltd respectively in 2022, signalling the lender’s growing appetite for investment in a market with more than 300 million people.
It also runs subsidiaries in Tanzania and the Democratic Republic of Congo (DRC).
The share sale increased UBA Plc’s shareholding in the Kenyan and Ugandan units from 81 percent and 69 percent to 94 percent and 80 percent respectively, according to the lender’s latest annual report (2023).
The additional stakes in the Kenyan and Ugandan units were collectively acquired at NGN 18.49 billion ($16.04 million) comprising a payment of NGN6.96 billion ($6.03 million) for the 11 percent stake in Uganda subsidiary and NGN 11.52 billion ($9.99 million) for the 13 percent stake in the Kenyan subsidiary.
In addition to the share purchase, UBA plc further injected NGN 17.32 billion ($15.02 million) of additional capital in the two subsidiaries in 2023 that included NGN 5.14 billion ($4.45 million) and NGN 12.17 billion ($10.55 million) worth of additional investments in Kenya and Uganda respectively.
UBA’s subsidiaries in Kenya and Uganda started operations in 2009 and 2008 respectively.
The Kenyan subsidiary narrowed its losses to NGN 1.31 billion in 2023 from a net loss of NGN 1.67 billion($1.44 million) in 2022 while the Ugandan subsidiary made a net profit of NGN 3.1 billion($2.68 million), from a net loss of NGN 840 million($728,869) in the same period.
In Tanzania, UBA’s net profit increased by more than ninefold to NGN 2.14 billion($1.85 million) in 2023 from NGN 216 million($187,423) in 2022, while UBA Congo (DRC)’s net profit increased by more than sixteen fold to NGN 4.32 billion($3.74 million) from NGN 265 million($229,941) in the same period.
UBA group’s net profit for the accounting period ended December 31, 2023, declined to NGN 607.69 billion ($527.29 million) from NGN 170.27 billion ($147.74 million) in 2022.
Three Nigerian banks have set a foothold in East Africa.
In 2020, Access Bank Plc more than doubled its investment in its Rwandan subsidiary after acquiring Kenya’s Transnational Bank. Access Bank Plc now owns a 75 per cent shareholding in its Rwandan subsidiary, which has eight branches across the country.
Guaranty Trust Bank (GT Bank), which acquired 70 per cent shareholding in Kenyan-owned Fina Bank Group in 2013.
Nigeria’s Access Plc disclosed in January disclosed that it is in the process of acquiring an 80 percent stake in Uganda’s Finance Trust Bank Ltd, in a transaction that will be closed in the first half of this year (2024) and last month (March), the lender made another acquisition by taking over National Bank of Kenya (NBK), a subsidiary of KCB group, saying it was attracted by Kenya’s pivotal role in East Africa’s trade corridor.
Nigerian banks are positioning themselves to dominate Africa’s access and links to global financial gateways in India, Dubai and China.
UBA Plc which operates in 20 countries across Africa, the United Kingdom France, and the United Arab Emirates provides corporate, commercial, Small and Medium-sized Enterprises (SMEs) and consumer banking services to more than 35 million customers globally.
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