The proposed acquisition of Bank of Kigali (BK) by Barclays Bank PLC will not materialise soon, a top official of the Barclays has revealed.
According to Marc Holtzman, the Vice Chairman of Barclays Investment Capital, the takeover of one of the most solid banks in the country is not likely soon, mainly due to the on-going financial crisis.
The offer to take 70 percent of the government shares in the bank by Barclays, which was at the time experiencing the effects of the credit crunch, did not impress the government hence suspending the privatisation exercise.
“One thing I know is that the negotiations were led by Barclays PLC, the commercial banking arm of Barclays---- and from what I understand, those negotiations are no longer active,” said Holtzman who was in the country with a delegation of investors from Europe.
He however could not reveal or rule out whether Barclays is still interested in the bank or whether it would set up in Rwanda.
Following the suspension of the talks in October 2008, Finance Minister James Musoni said that the deal could not proceed amidst the biting global financial crisis.
“We suspended this because of the current environment. You expect big banks to come and buy Bank of Kigali and most of these banks are in these uncertainties. So we realised this was not the right time for this transaction---that is why we suspended it,” Musoni said.
Musoni said the talks would proceed ‘when the situation settles’ and the coming of Holtzman, who is also a voluntary board member of BK’s Board of Directors led to speculation that the UK-based bank was going to re-launch a takeover bid.
BK is the country’s largest bank boasting of a market share of about 40 percent while Barclays is a major global financial service provider engaged in retail and commercial banking, credit cards, investment banking, wealth management and investment management services.
It boosts of an extensive international presence in Europe, the USA, Africa and Asia.
The plan to privatise BK has been in the pipeline for the last 4 years after government through its parastatals increased its stake in the bank from 36.5 percent to almost 99.8 percent after repurchasing 50 percent shares owned by Banque Belgolaise, a Belgian bank that pulled out in 2005.