United Bank Limited has announced plans to sell off its operations and business in Tanzania to Exim Bank.
The two banks have agreed on a proposed deal of sale and purchase of assets and liabilities, however, regulatory, legal, and technical exercises such as due diligence will take place in the days to come.
According to the official notification issued to the Pakistan Stock Exchange, it said
“UBL and UBTL have entered into a Letter of Intent (LOI) with EXIM Bank Tanzania Limited for the sale of the undertaking of UBTL as an asset/liabilities sale subject to all applicable corporate compliances and the regulatory approvals at both places, i.e. Pakistan and Tanzania.”
United Bank (Tanzania) Limited (UBTL) is a wholly owned subsidiary of United Bank Limited. It was established in 2012. Presently, the bank is operating in Tanzania and its banking license will remain intact.
In 2018, UBL made a capital injection of Rs. 509 million to meet the minimum capital requirements of its subsidiary in Tanzania. The bank is running in losses though its loss before tax for 2018 reduced by 48% as compared to 2017.
The management of UBL is presently re-evaluating its business strategy and the outlook for UBTL. The signing of LOI with Exim Bank is the part of this strategy.
Exim Bank is a large banking institution in Tanzania, providing commercial banking services to individuals, small-to-medium-sized businesses (SMEs), and large corporate clients. As of December 2017, the bank’s total assets were valued at $706.5 million.
The bank’s operations span Dar es Salaam, Zanzibar, Tanga, Morogoro, Kilimanjaro, Arusha, Manyara, Mwanza, Shinyanga, Kigoma, Iringa, Mbeya and Mtwara regions in Tanzania and overseas subsidiaries in the Anjouan, Moheli and Moroni Islands of the Union of Comoros, in the Republic of Djibouti and Uganda– an international presence unmatched by other Tanzanian banks.