SOUTH AFRICA – Arise’s recent acquisition of a 27.7 % stake in CAL Bank in Ghana is set to boost the banking sector in the country.
The shareholding in CAL Bank was acquired by Arise from DPI, a leading Africa-focused private equity firm with assets in excess of US$1 billion under management. Settlement is to be effected on 14 February 2017.
Arise, a collaborative partnership between international companies, Norfund, FMO and Rabobank take and manage minority stakes in Sub-Saharan African Financial Service Providers (FSPs) with the core aim of building strong and stable institutions that serve retail, Small and Medium Enterprises (SMEs), the rural sector, and clients who have not previously had access to financial services.
“The main objective of establishing this company was to strengthen and develop effective, inclusive financial systems in Africa in order to contribute to economic growth and poverty reduction,” said Arise CEO, Deepak Malik.
“We are excited to partner with CAL Bank, the 3rd largest bank in Ghana based on loans advanced and a listed company on the Ghana Stock Exchange. The institution has a strong track record of delivering high growth and solid performance and with the support of Arise is well-positioned to deliver future growth in Ghana, one of Africa’s core emerging economies” added Malik.
Speaking from the bank’s Head Office, Mr. Frank Adu Jnr. CEO of CAL Bank remarked: “This landmark transaction will mark the successful exit of a leading private equity investor, despite a challenging macro environment in Ghana. We look forward to continuing a fruitful partnership with Arise as the new shareholders in CAL Bank”.
In another development an approval in principle of a USD 50 million bridging loan by Arise is set to boost the banking sector in Uganda.
According to Arise Chief Executive Officer, Deepak Malik the company will provide a USD 50 million bridging finance facility to dfcu Ltd in Uganda. “The facility was availed on commercially-agreed terms, to enable commencement of the recapitalisation of dfcu Bank in the short term, while complying with regulatory capital thresholds” he said.
dfcu Bank recently concluded an agreement with the Bank of Uganda to purchase the assets and assume the liabilities of Crane Bank Limited (CBL), which was in receivership. The acquisition of CBL will allow dfcu Bank to diversify it service offerings to its clients and make banking more accessible to the public. Further, the integration will enhance dfcu Bank’s competitive edge against peers in the retail and Small Medium Enterprise (SME) sector.
Juma Kisaame, Managing Director dfcu Bank commented, “The acquisition gives us the impetus to achieve our strategic objective of building a robust retail operation with multiple delivery channels whilst consolidating our position as a key player in the SME market segment. It also supports our goal of promoting financial inclusion in Uganda and we welcome the Arise partnership as a contributor to building a stronger financial sector in Sub Saharan Africa”.
“Arise supports the planned expansion of dfcu Bank. We foresee the integration as a catalyst for creating a strong and efficient Ugandan bank, which will have extensive local representation and scalability of distribution (via branch and digital channels)” said Malik.