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MarketScreener Homepage  >  Equities  >  Johannesburg Stock Exchange  >  Standard Bank Group Limited    SBK   ZAE000109815

STANDARD BANK GROUP LIMITED

(SBK)
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End-of-day quote. End-of-day quote Johannesburg Stock Exchange - 11/26
128.29 ZAR   +1.06%
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Ugandan banks jolted by court ruling on syndicated loans

10/08/2020 | 01:58pm EST

KAMPALA, Oct 8 (Reuters) - Banks in Uganda plan to appeal a court ruling issued on Wednesday that has effectively declared illegal certain syndicated loans - representing at least $1.5 billion worth of debt - an industry body said on Thursday.

The ruling by the Commercial Court was the result of legal action by Ham Enterprises Uganda Ltd, against Diamond Trust Bank (DTBK) in neighbouring Kenya along with its Uganda subsidiary.

"The court said the transactions or the credit facilities that were advanced by DTBK were illegal, null and void and unenforceable because it did not have a licence to conduct financial institutional business in Uganda," lawyer for Ham Enterprises Matthew Kiwumba told Reuters.

Diamond Trust Bank's lawyer, Kiryowa Kiwanuka, told Reuters it had filed a notice of appeal against the ruling.

"As a result of the judgement and its implications, the syndicated portfolio currently seated with commercial banks... is now at risk," Wilbrod Humphrey Owor, executive director of Uganda Bankers Association, an industry body, said in a statement.

At least $1.5 billion in syndicated credit to private sector borrowers could be affected by the ruling, the statement said.

Owor also said in the statement chief executives of all 35 financial institutions in the country resolved to join Diamond Trust Bank and appeal the ruling.

A spokesman for Uganda's judiciary, Solomon Muyita, declined to provide details of the court ruling. In a statement late on Thursday the finance ministry said it had received inquiries from bilateral and multilateral lenders about the implication of the ruling.

The government, the statement said, will "undertake all its obligations and duties" on already procured and future syndicated loans.

Diamond Trust Bank Kenya and its Uganda subsidiary had put together credit facilities as syndicated loans for Ham Enterprises over several years.

Ham and the banks were in dispute over repayments, which resulted in Ham taking legal action against Diamond Trust Bank Kenya, alleging it had illegally advanced the loans because it did not have a Uganda banking licence.

Ugandan banks rely on syndicating big credit lines or loans with parent banks in bigger markets to serve major customers like telecoms and manufacturing companies.

Local units of major international banks in Uganda include ABSA, Standard Bank and Standard Chartered .

($1 = 3,697.0000 Ugandan shillings) (Reporting by Elias Biryabarema. Editing by Jane Merriman, Kirsten Donovan)


© Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
ABSA GROUP LIMITED 0.12% 115.45 End-of-day quote.-22.67%
DIAMOND TRUST BANK KENYA LIMITED 0.00% 63.5 End-of-day quote.-41.74%
STANDARD BANK GROUP LIMITED 1.06% 128.29 End-of-day quote.-23.78%
STANDARD CHARTERED PLC 0.54% 463.7 Delayed Quote.-34.91%
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Financials
Sales 2020 110 B 7 227 M 7 227 M
Net income 2020 13 924 M 913 M 913 M
Net Debt 2020 - - -
P/E ratio 2020 15,9x
Yield 2020 0,82%
Capitalization 203 B 13 278 M 13 274 M
Capi. / Sales 2020 1,84x
Capi. / Sales 2021 1,77x
Nbr of Employees 50 691
Free-Float 93,7%
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Technical analysis trends STANDARD BANK GROUP LIMITED
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Mean consensus OUTPERFORM
Number of Analysts 10
Average target price 131,15 ZAR
Last Close Price 127,29 ZAR
Spread / Highest target 21,8%
Spread / Average Target 3,03%
Spread / Lowest Target -15,5%
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Managers
NameTitle
Simpiwe Kenneth Tshabalala Chief Executive Officer & Executive Director
Thulani Sikhulu Gcabashe Chairman
Arno Daehnke Group Financial Director
Alpheus Mangale Group Chief Information Officer
Tau Mashigo Chief Technology Officer