Reason Why BoU Took Over Crane Bank

Posted: 2016-10-21T07:35:30Z Read: 3,510 times
Reason Why BoU Took Over Crane Bank

Yesterday, BoU while exercising its powers under Section 87(3), 88(1)(a) & (b) of the Financial Institutions Act 2004, with effective Thursday October 20, 2016, took over the management of Crane Bank Limited.

The BoU went ahead to suspend the services of Crane bank  managing  director, instructed him to handover the responsibilities to the central bank statutory manager Mr. Edward Katimbo Mugwanya though he will continue to serve crane bank ltd as a principal support of the statutory manager.

This website understands the­­­­­ main reason why The Bank of Uganda took over the management control of Crane Bank was because it lacked sufficient capital and posed a systemic risk to the financial system, the central bank said on Thursday.

It should be noted Crane Bank has been the third largest privately owned Ugandan bank and has been supporting many smaller banks through the inter-banking system.

"Bank of Uganda further reassures the public that it will continue to protect depositors' interests and maintain the stability of the financial sector," Mutebile said in a statement.

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.