DFCU Bank takes over troubled Crane Bank

Friday January 27 2017

Uganda’s central bank has taken over management of Crane Bank due to a financial crisis that has left the lender without adequate capital. PHOTO | MORGAN MBABAZI

Uganda’s central bank took over management of Crane Bank due to a financial crisis that has left the lender without adequate capital. PHOTO | MORGAN MBABAZI | NATION MEDIA GROUP

By The EastAfrican Reporter

Uganda's central bank has transferred the assets and liabilities of Crane Bank to DFCU bank.

In a statement on Friday, DFCU said it has entered into an agreement with the regulator to take over the troubled lender which was put under receivership for lack of adequate capital in October last year.

DFCU said its shareholders had also approved the transaction which will see the mid-tier lender buy the assets of Crane Bank and assume its liabilities.

“The bank has started integrating the liabilities and assets of CBL into its business. Shareholders of the company are advised to exercise caution when dealing with the company’s securities,” DFCU chairman Elly Karuhanga said in a notice to the Uganda Securities Exchange.

While putting Crane Bank under receivership, the Bank of Uganda said the lender's capital reserves had been eroded by high levels of unsecured loans that turned bad.

The bank, the third largest in Uganda, has 46 branches and about half a million customers.

Crane Bank is owned by billionaire businessman Sudhir Ruparelia, whose family controls a 48 per cent stake with another 48 per cent held by investment firm White Sapphire whose ownership is unknown.

The bank began its operations in 1995 and had been reporting impressive growth until a surge in bad debt saw it go into the red in 2015.