The Central Bank of Uganda has taken management control of Crane Bank.
Crane Bank has been termed to have been faced with insufficient capital, posing a systemic risk to the financial system, CBU Thursday.
This comes after Imperial Bank Uganda was sold and put under central bank in one year.
Bank of Uganda governor Emmanuel Tumusiime-Mutebile, who called the bank the country’s third largest, told a news conference it would remain open and operate normally
“Bank of Uganda further reassures the public that it will continue to protect depositors’ interests and maintain the stability of the financial sector,” he said.
In a sign the bank might be facing challenges, the BoU issued a statement last week saying messages circulating on WhatsApp that told depositors to withdraw cash from Crane Bank had not been sent by the central bank.
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.
This was not the first time Crane bank’s financial health had come under public scrutiny. In May 2005, there were rumours that the bank was closing, which led to many clients withdrawing their deposits.
At the time, Bank of Uganda came out strongly to defend the bank, saying it was well-capitalised. The rumour gradually died down and the bank appeared to grow from strength to strength.
As the bank embarked on an ambitious expansion drive, Bank of Uganda gave it a vote of confidence by offering it the assets of the National Bank of Commerce after it collapsed in late September 2012