Business

Mutebile defends Crane bank, moves to takeover Cairo & UBA banks

cairo-international-bank

The Governor Bank of Uganda, Emmanuel Tumusiime Mutebile, has assured the public that Crane bank owned by Ruparelia group is not collapsing as rumours would have it.

Speaking on Wednesday, Mutebile said talk of Crane Bank collapsing is not possible.

“Crane Bank cannot collapse, Bank of Uganda takes over a bank when it is necessary to protect depositors interests,” he said.

He added: “I’m afraid what you read in some newspapers is rubbish. Our financial sector is strong, vibrant and profitable.”

BoU puts Cairo and UBA banks on watch list

Meanwhile, the banking sector remains on fire with concerns that Cairo International Bank and UBA could have their management taken over by Bank of Uganda.

While Bank of Uganda Governor Mutebile dismissed reports of a troubled financial sector; he revealed that two banks are on the central bank’s “watch list”.

Sources said it’s not the only two banks struggling with capitalisation but also Eco Bank.

The development causing a bank run in Kampala was triggered by Central Bank’s takeover of Crane Bank on grounds of being undercapitalised.

UBA has not made profits in the last seven years with total assets plummeting to Shs165bn in 2015 from Shs185bn in 2014.

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It has equally closed branches in many parts of Kampala.

Observers say the causes of the failing banking sector could be more to do with the poor performance of the economy with growth averaging at less than 5 percent for the last ten years.

At the time of the takeover, Crane Bank was controlling 8.3 percent (Shs1.7tn) of the total industry assets of Shs21.4tn.

Bank of Uganda officials say the move was necessary to protect customers’ deposits.

However, this triggered shocks in the industry, risking collapse of the entire financial system.

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