NAIROBI, Kenya, May 28 – Barclays Bank Kenya shareholders have approved the sale of the bank’s Custody business to Standard Chartered Bank.
The deal, which is still subject to regulatory approval, is expected to rake in Sh3.5 billion to be re-invested in the bank’s business.
Speaking upon approval of the deal at the bank’s annual general meeting, Managing Director Adan Mohammed said the move was likely to improve shareholder earnings.
“It is in the best interest of shareholders that we disperse of the custody business because we are getting good value for it,” Mr Mohammed said.
The Barclays Custody business deals in settlement of securities trades, safekeeping and registration of securities.
It also deals in custodian business services like income and interest collection, corporate actions management, proxy voting services, allied banking and foreign exchange requirements among others.
Barclays Bank PLC agreed to sell its custody business in Africa to Standard Chartered back in April.
The Barclays African custody business had gross assets of £1.9 million and assets under custody of £3,862 million as at December 31, 2009.
Mr Mohammed said the sale of the custody is expected to be complete in October giving the bank additional capital to upgrade its core banking platform.
“We have had one for a long time and we are in the process of upgrading it. We hope it will up by the third quarter of this year,” he said.
Elsewhere on Friday, Standard Chartered Bank shareholders also approved plans for a Sh2.5 billion rights issue which Chief Executive Richard Etemesi said would be used in the acquisition of the custody business.