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Dfcu acquired Crane bank for Shs 200 billion

Dfcu bank acquired Crane bank assets at Shs 200bn payable in two and half years, fresh details of the deal show.

Also, dfcu would pay the money in ten quarterly installments starting in the last three months of 2017. This means payments would start nine months after dfcu took over the assets. These revelations are contained in the Bank of Uganda annual report for 2016/17.

“The receivable from dfcu bank is fully secured by government treasury securities,” said the central bank in the report.

It added: “The amount due from dfcu is interest-free and recoverable over 10 quarterly instalments over a two-and-half year period commencing in the third quarter of 2017…”

Crane bank ran into trouble in October last year after it became undercapitalised. BOU appointed a statutory manager for Crane bank and later placed the bank under receivership before selling it to dfcu – putting to an end a bank that many thought was too big to fail.

With the takeover, dfcu saw its half-year profit to June 2017 jump to Shs 114bn, from Shs 23bn over the same period a year before.


For the central bank, the intervention in the Crane bank crisis was a costly venture.  According to the report, BOU spent Shs 473bn in keeping the bank alive. This money will be partly paid by dfcu and the remainder from former shareholders of the defunct bank, according to the report.

As at June 30, 2017, the outstanding balance on this account was Shs 397.9bn recorded as amounts due from Crane Bank Limited.  “This was composed of Shs 200bn due from dfcu bank and Shs 197.9bn due from Crane Bank Limited shareholders,” the report said.

The central bank is currently in court with businessman Sudhir Rupareria to recover the money. The cost of saving Crane Bank from collapse increased from Shs 19bn in June 2016 to Shs 220.8bn.

“This was mainly due to intervention costs relating to the resolution of Crane Bank Ltd. This resulted in an impairment of the bank’s core capital, which fell from Shs 350.2bn at the end of 2015/16 to a deficit of Shs 17.3bn at the end of 2016/17.”

With its capital falling, BOU says it needs recapitalisation from government.

“BOU moved Crane Bank Limited from statutory management to receivership to avoid a systemic problem in the financial sector and transferred the majority of its liabilities (including deposits) and assets to dfcu bank on January 24, 2017,” BOU’s report said.


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