Government is in negotiations with three foreign ‘suitors’ to capitalize troubled Crane Bank whose management was last week taken over by Bank of Uganda, the Finance Minister Matia Kasaija has disclosed.
He however remained tight limped on the details saying the talks were still premature.
On Tuesday, Minister Kasaija told journalists that; “Many people are speculating about Crane Bank closing but we are going to run it and it will survive. Clients should be assured that no branch will be closed and transactions will remain normal. There’s no need to panic. We have already started to get people who want to invest money in Crane Bank.”
“The bank posted a Shs 48Bn profit in 2014 but the following year, it accrued losses which affected the capital base of the bank. The law requires that if any bank goes below the credit to deposit ratio, Bank of Uganda takes over to safeguard clients’ money.”
He explained that despite Bank of Uganda cautioning Crane Bank proprietor Sudhir Ruparelia and other stakeholders to inject more capital in the bank or give in collateral due to mounting pressures, they still couldn’t manage to raise it.
“We so far have three suitors who are talking with us to invest in the bank. I won’t reveal the details because we want to keep it on low key for now. But if they manage to capitalize it, Bank of Uganda will then withdraw from the management with its new ownership.”
However, former Crane Bank Directors have accused Bank of Uganda for “impatience”, saying the institution was still on the search for a reputable investor to consolidate its expanded networks across the country.
They further alleged that the Central Bank lacked capacity and customer confidence to run such a big commercial bank.
The Minister denied claims that there are other distressed banks, saying the banking sector is performing well.
“The sector is still firm, most banks are meeting their criteria as set by BOU. I haven’t heard any other reports from the regulator of banks that have problems. Some commercial banks like Stanbic are making very good profits for their stakeholders,” he noted.
Crane Bank is the third largest bank in the country with 46 branches. It had as well expanded its operations to Rwanda where government assured of its capital strength and efficiency.