Government’s sale of Banque de Kigali (BK) to Barclays bank is still in balance, a top official has revealed.
Manasseh Twahirwa, Executive Secretary of Rwanda Privatization Secretariat, said that Barclays bank, a London based commercial bank has not yet met the value at which government is willing to part with Rwanda’s largest commercial bank.
Government has been engaged in negations with Barclays bank for over a period of one year.
It was expected that the deal would have been sealed by August this year for a sale of 99 percent of BK’s shares to Barclays.
“This is a healthy bank and we expected a fare value for it but the offer submitted by Barclays bank did not interest the eyes of the government,” said Twahirwa.
He was however hesitant to reveal the value government is willing to accept and what exactly Barclays has offered citing confidentiality.
Barclays, the third largest bank in the United Kingdom is one of the banks that have been hit hard by the current global financial crisis, something that is believed to have affected its investment decisions.
“The Barclays contacts are still under way because they didn’t communicate their pulling out as the team tries to source other potential investors,” Twahirwa said.
Twahirwa said apart from government policy of market liberalization, the privatization of BK is not in hurry given that the bank is doing well financially and in terms of market share.
BK’s profits after tax increased by 44 percent from Frw2.9 billion in 2006 to Frw4.2 billion in 2007 while its deposits increased by 47.6 per cent from Frw69 billion to Frw101.8 billion in the same period. Figures for 2008 are yet to be released.
BK also increased its loan portfolio to the public last year by 28.6 percent from Frw37.8 billion in 2006 to Frw48.6 billion in 2007.
The deal to privatize the BK comes over two years after the government increased its shareholding in the bank from 36.5 percent to almost 99.8 percent when it repurchased 50 percent from Belgolaise, a Belgian bank that pulled out in 2005.