dfcu Bank explains Crane Bank takeover

Parliament. dfcu bank officials have maintained that half of Crane Bank’s loans were non-performing and explained that they carried out a due diligence analysis before taking over the bank.
The dfcu team led by Mr Jimmy Mugerwa, the bank chairman told the MPs investigating irregularities in the closure of banks that they discovered a number of non-performing assets, questionable loan approvals, poor credit administration and collateral that was given out with no evaluation of assets.
They also explained that it was BoU that invited dfcu to bill for the assets and liabilities of CBL and that after they took over all efforts were made to protect the interests of the depositors. dfcu officials including former MD Juma Kisaame, testified on oath.
Documents presented by dfcu officials before MPs also revealed that Crane Bank had poor credit monitoring standards illustrated by an unclear relationship management model, lack of call reports and no proactive project management.
Mr Mugerwa told MPs on Parliament’s Committee on Commissions, Statutory Authorities and State Enterprises (Cosase) on Wednesday evening that Crane Bank concentrated mainly in high risk products and pointed out that this was in violation of the Financial Institutions Act.
dfcu officials also told MPs that the close to 600,000 depositors acquired from Crane Bank continue to operate with ease but said that they are yet to acquire possession of Crane Financial Services because the company chairman has refused to yield to dfcu’s request to execute the necessary documentation.
Mr William Ssekabembe, a dfcu Bank executive director, last evening told the Committee that the bank had “several meetings” with Mr Katimbo Mugwanya, a statutory manager that had been appointed by Bank of Uganda to handle the takeover.
“There is no way we would have taken over that bank without certain insights. I can confirm that we had several meetings and the statutory manager stayed on for several weeks with certain facilities that he was using for some time,” Mr Ssekabembe said.
By last evening, MPs were still cross-examining dfcu officials.
Meanwhile, the Committee yesterday discovered that there is lack of clarity over the ownership of the Cooperative Bank that was closed by Bank of Uganda in 1999 after three different groups claimed to have been the owners. The alleged owners of the bank appeared before the committee and accused BoU of killing their bank.

The law

In exercise of its powers under Section 87(3), 88(1)(a) & (b) of the Financial Institutions Act 2004, Bank of Uganda effective October 20,2016, took over the management of Crane Bank Limited. This action was upon a determination by Bank of Uganda that Crane Bank Limited was a significantly undercapitalised institution as defined by law, posed a systemic risk to the stability of the financial system and that the continuation of Crane Bank’s activities in its current form is detrimental to the interests of its depositors.
The shareholders, however, told Cosase that the bank was illegally, unprofessionally and unfairly destroyed by BoU officials.
people in safer places, with preference given to Bugisu sub-region. The 18 clans, who say they are struggling to hire lawyers to represent them, filed a case at the High Court in Mbale in 2012 against MP Mudimi Wamakuyu, who secured a title on the land, but the matter has never been heard.
Mr Ecweru, however, said for those who do not want to go to Bulambuli can find land anywhere in Bugisu sub-region.
“They will be given food until their first harvest,” he said.