Banks That Might Follow Crane Bank’s Path Revealed
Following the news of Bank of Uganda taking over Crane Bank Management, the public has been in panic speculating that the banking sector is weaker than ever.
It is understood that several banks have been making losses over the past few years and this has been the main cause of worry among different depositors.
With the collapse of a 3rd major bank (Crane bank) in Uganda has steered storm and people are withdrawing their deposits hence making banks make more losses.
Red Pepper online understands that with the rate at which the depositors are withdrawing their money from the bank, the worst performing banks are likely to be taken over by Bank of Uganda.
We examine the banks that are likely to follow Crane Bank’s fate.
Though it registered a net profit of up to Shs41.5billion in 2014, nonperforming loans (NPL) in 2015 rose to Shs71billion, on account of some customers finding it hard to pay back borrowed money.
With high amount of non-nonperforming loans and the current speculation in the weakening banking sector, it might prompt bank customers to withdraw their deposits hence making it difficult for the bank to create more credit.
There are also rumours that Dfcu investors that is; Norwegian Soviet Fund and British government have been waiting to pull out.
This website understands that a former banking officer of Dfcu bank was accused of stealing sh709m from the bank.
Cairo International Bank
Cairo International Bank (CIB) is a commercial bank in Uganda.
It is one of the financial institutions licensed by the Bank of Uganda, the central bank and national banking regulator.
In December 2011, Cairo International Bank was a small retail bank, with total assets valued at approximately US$30 million.
This asset valuation represented less than one percent of all bank assets in Uganda and ranked Cairo International Bank as the twentieth largest commercial bank in Uganda.
Ever since CIB was implicated in the Shs165bn pension scam, it has given it bad publicity which has resulted into a bad reputation.
Although CIB recorded a net profit of Shs289m in 2015, it had recorded a loss of Shs1.5bn in 2014. It had earlier on in 2013 made a net loss of Shs1.3bn.
The banks saw its Non-Performing Loans (NPLs) increase to Shs2.2bn in 2015, up from Shs1.89bn in 2014.
In 2014 and 2013 CIB’s key performance parameters were negative.
Sources have also revealed that recently Cairo International Bank changed shareholding without permission from Bank of Uganda and that depositors are being limited on the amount to withdraw.
United Bank for Africa (Uganda) is a commercial bank that mainly focuses on the individual customer, small and medium enterprises (SMEs), as well as large corporations.
The bank has been making losses for the last seven years, having joined the Ugandan market in 2008
Last year, UBA’s losses increased to Shs4.3bn, up from Shs4bn loss recorded in 2014.
The bank also saw its customer deposits reduce to Shs120.6bn in 2015, down from Shs145.7bn in 2015
UBA Uganda has closed Ndeeba and Mukono branches.
Ndeeba was merged with Kansanga while Mukono was merged with Jinja Road branch.
This was because the above branches were not performing according to the bank’s expectations. UBA has less than 10 branches in the country.
Ecobank began operations in January 2009 as a full-service bank providing wholesale, retail, investment and transaction banking services and products to governments, financial institutions, multinationals, international organizations, medium, small and micro businesses and individuals
Since then, the bank is yet break-even.
Its losses reduced to Shs764.5m in 2015, down from Shs5.2bn in 2014.
Commercial Bank of Africa (CBA)
The Commercial Bank of Africa (Uganda) (CBAU) is a commercial bank in Uganda
The bank opened in 2014, following the issuance of a commercial banking license by the Bank of Uganda, the central bank and the national banking regulator.
The bank is a member of the Commercial Bank of Africa Group (CBA Group), headquartered in Nairobi, Kenya, with subsidiaries in Kenya, Tanzania, and Uganda.
Commercial Bank of Africa (CBA) made a whooping loss of Shs4.1bn in 2015, down from Shs4.6bn loss in 2014.