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Added: 1 year 3 months ago
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How did Crane Bank fall on hard times?
The bank that was flying high at 199 billion shillings in capital in 2015, is now tightly under the management of the Bank of Uganda over capitalisation concerns.

The bank that  was flying high at 199 billion shillings in capital in 2015, is now tightly under the management of the Bank of Uganda over capitalization concerns.

In a public notice to customers, Bank of Uganda said the bank’s under-capitalization posed a systematic risk to the  stability of the financial system and the continuation of its activities under the current form were detrimental  to depositors.

The third biggest bank in Uganda, with 210 billion in share capital from last year had crumbled under the lens of the Central Bank’s minimum capitalization threshold of 25 billion forcing the regulator to take over its management. 

But how did the bank wind up in the problems it’s tangled in?

There was nothing, from the glowing figures Crane Bank always presented that showed it was destined for this moment.

From 2011 when its cash and assets with the Central Bank were Shs99 billion, Crane Bank capital rose to Shs199 billion by last year. The banks customer deposits, were on the same meteoric rise from Shs841 billion in 2012 to Shs1.2 trillion in 2014. 

But while the bank continued its sharp rise, red flags started to appear in their numbers.

For example, in just a year, Crane Bank’s non-performing loans rose from Shs19.3 billion to Shs142 billion. 

The bank, would also, in just a year, fall from its Shs50.6 billion profit to a paltry Shs1.8 billion, an almost 95% decline in profit, in just a year. 

It was, as such no doubt, that the central bank notes that in September 2015, they started to grow weary of the bank.

Yet now under BOU’s management, Crane Bank will face a more stringent audit to determine how, in a space of a year, the glorious bank came tumbling down