Uganda’s central bank takes control of Crane Bank

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Bank of Uganda has taken management control of Crane Bank because it lacked sufficient capital and posed a systemic risk to the financial system, the central bank announced on Thursday.

Bank of Uganda Governor Emmanuel Tumusiime-Mutebile, who called Crane Bank the country’s third largest, told a news conference in Kampala that the bank would remain open and operate normally.

“Bank of Uganda further reassures the public that it will continue to protect depositors’ interests and maintain the stability of the financial sector,” he said in his statement.

In a sign the bank might be facing challenges, the Bank of Uganda issued a statement on Wednesday saying messages circulating on Whatsapp that told depositors to withdraw cash from Crane Bank had not been sent by the central bank.

Crane Bank reported a consolidated pre-tax loss of 7.353 billion shillings ($2.14 million) in 2015 compared to a 57.066 billion shillings profit in 2014, after reporting a rise in expenses and impairment losses on loans and advances.

Assets at the end of 2015 were 1.810 trillion shillings. Crane Bank, set up in 1995, offers corporate and retail services, with a focus on micro, small and medium-sized businesses.

June this year, stiff competition was expected when the Ugandan giant bank joined the Rwandan market.

The entry of Crane Bank in Rwanda was part of its strategy to expand across the region. That would make it the first indigenous Ugandan bank to venture into the Rwandan market.

The bank joined two banks from Kenya — Kenya Commercial Bank (KCB) Rwanda and Equity Bank Rwanda — which have had operations in the country since 2009 and 2011, respectively, as among regional banking institutions with branches in the country.

Crane Bank is controlled by businessman Sudhir Ruparelia, who controls 48.67 percent of the voting rights, based on shares held directly and by close members of his family, according to the bank’s 2015 financial report on its website.

Forbes listed Ruparelia as one of Africa’s 50 richest men. ($1 = 3,435.0000 Ugandan shillings)

As of last December, Crane Bank was the fourth-largest commercial bank in Uganda, with an asset valuation of approximately $575.3 million and shareholders’ equity in excess of $114.2 million.

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