Publication: Bank Privatization in Sub-Saharan Africa : The Case of Uganda Commercial Bank
Date
2007-11
ISSN
Published
2007-11
Author(s)
Clarke, George R.G.
Cull, Robert
Fuchs, Michael
Abstract
Previous empirical analyses have found
that bank privatizations are more successful when the
government fully relinquishes control, when the bank is
privatized to a strategic investor, and when foreign-owned
banks are allowed to participate in the bidding. The
privatization of Uganda Commercial Bank (UCB) to the South
African bank Stanbic met all these criteria, suggesting that
it is a likely candidate for success. But other features
suggest reasons for caution: UCB dominated the Ugandan
banking sector prior to privatization and the institutional
environment in Uganda was less favorable than in many of the
middle-income countries looked at in earlier empirical
studies. Despite these concerns, the privatization appears
to have been relatively successful. The portfolio of the
privatized bank, which was cleaned prior to sale, remains
relatively strong and profitability and credit growth are
now on par with other Ugandan banks. Though market
segmentation remains a concern since Stanbic faces little or
no direct competition in many remote areas, some early
results suggest that access to credit has improved for some
hard-to-serve groups.
Citation
“Clarke, George R.G.; Cull, Robert; Fuchs, Michael. 2007. Bank Privatization in Sub-Saharan Africa : The Case of Uganda Commercial Bank. Policy Research Working Paper; No. 4407. © World Bank, Washington, DC. http://openknowledge.worldbank.org/entities/publication/3f52446f-c258-5e10-92dd-db602c50e97d License: CC BY 3.0 IGO.”
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