UBL sells Tanzania subsidiary

Announces it does not find African market commercially viable

KARACHI: United Bank Limited (UBL) has announced that it has voluntarily exited from Tanzania as it did not find the market commercially viable.

The bank reported to the Pakistan Stock Exchange (PSX) on Monday that it had sold its Tanzania subsidiary to a local bank and surrendered the banking licence to the Bank of Tanzania - the central bank.

“The decision is part of UBL’s strategy for global repositioning and realignment based on purely commercial considerations,” UBL Company Secretary and Chief Legal Counsel Aqeel Ahmed Nasir said in a notification to the PSX. UBL’s share price increased 2.97%, or Rs4.13, to Rs143.05 with trading in 1.34 million shares at the PSX on Monday.

This is the second international branch/subsidiary of UBL that has been closed in the past one year.

Earlier in November 2018, it announced the shutdown of its New York branch under the global realignment strategy while Washington found it allegedly non-compliant with anti-money laundering laws.

“We have to inform that the transaction related to the asset liabilities sale of UBL Bank (Tanzania) Limited (UBTL), a wholly owned subsidiary of United Bank Limited, Pakistan (UBL), has been concluded with Exim Bank Tanzania Limited,” he said.

Besides, the banking licence, awarded by the Bank of Tanzania to UBTL, has been surrendered to it. “Simultaneously, the orderly liquidation of UBTL is in process,” he added in the notification.

To recall, the Bank of Tanzania fined it Tanzanian shilling 325 million (equivalent to around $141,016 only) on September 19, 2019.

UBL Tanzania was one of the five banks on which the Bank of Tanzania imposed monetary penalties “for failure to conduct proper customer due diligence and file suspicious transaction reports (under Anti-money Laundering Regulation 2012) to the Financial Intelligence Unit (FIU),” according to a notification of the Bank of Tanzania.

A UBL official, while talking to The Express Tribune, said the monetary fine imposed by the central bank of Tanzania on UBL had nothing to do with the sale of the subsidiary there.

“The Bank of Tanzania fined the UBL Tanzania subsidiary in September 2019, while UBL decided back in February 2019 to sell the subsidiary under its global realignment strategy…It (Tanzania) became a non-core business for UBL,” he said.

Published in The Express Tribune, November 5^th, 2019.

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