Financial sector is stable despite Crane Bank take over- Central Bank

What you need to know:

The public is hereby advised to continue conducting their banking business without panic. Should anyone have any inquiries on Crane Bank Ltd, in particular, and the health of the financial sector in general, please contact the Director Communications

The Central Bank has refuted claims that the country’s financial sector is crumbling following the recent takeover of Crane Bank Limited.

In a statement from the Director Communications, Ms Christine Alupo, she dispels any rumors or claims regarding instability in the financial sector, urging the public to continue going about their banking business “without panic”.

“Following Bank of Uganda’s takeover of management and control of Crane Bank Ltd on October 20, 2016, there have been false and malicious rumours circulating on social media platforms regarding the state of the financial sector as a whole. The Bank of Uganda hereby dispels all those rumours and reaffirms that the financial sector as a whole is stable, sound and resilient,” the statement reads in part.

“The public is hereby advised to continue conducting their banking business without panic. Should anyone have any inquiries on Crane Bank Ltd, in particular, and the health of the financial sector in general, please contact the Director Communications,” the statement continues.

Last week, Bank of Uganda took over management of Crane Bank and suspended all members of the board.

According to Bank of Uganda governor Emmanuel Mutebile, Crane Bank is under-capitalised and poses systemic risk to the banking sector. However, Mr Mutebile noted that the bank remains open to customers under the management of Bank of Uganda.

“Crane Bank has been on the BOU watch list since September 2015 after regular onsite tests and external audit report. Crane Bank capital had fallen below the 50 per cent legal requirement under the law,” he said.

Mr Mutebile also ascertained that the suspension of Crane Bank top management by the Central Bank would have no bearing on the daily operations of Uganda’s fourth largest bank by assets.
The takeover, he said, was not necessarily a closure but the Central Bank would station appointed managers at the bank’s entire 47 branch to supervise and oversee daily operations until when the bank returns to stability.

This, according to analysts, means that Central Bank, at its discretion, might in future invite potential investors to recapitalise the bank or wholly sale out to an entity or investor that might choose to run the bank in its current form or under a changed entity which might include change of trading name and composition of directorship.