Crane Bank Limited was a

commercial bank A commercial bank is a financial institution that accepts deposits from the public and gives loans for the purposes of consumption and investment to make a profit. It can also refer to a bank or a division of a larger bank that deals with whol ...

Uganda Uganda, officially the Republic of Uganda, is a landlocked country in East Africa. It is bordered to the east by Kenya, to the north by South Sudan, to the west by the Democratic Republic of the Congo, to the south-west by Rwanda, and to the ...

licensed and supervised by the

Bank of Uganda The Bank of Uganda () is the central bank of Uganda. Established in 1966, by Act of Parliament, the bank is wholly owned by the government but is not a government department. History In 1979 and again in 1987, the Bank of Uganda managed to ma ...

(BOU), the central bank and national banking regulator. Crane Bank was acquired by

DFCU Bank DFCU Bank, registered as the Development Finance Company of Uganda Bank Limited, is a commercial bank in Uganda. It is licensed by the Bank of Uganda (BoU), Uganda's central bank and national banking regulator. Overview As of December 2022, DF ...

in January 2017 at a cost of Ush200 billion ($52.8 million) on grounds that it was undercapitalized as declared by the regulator

. Crane Bank Limited was closed by

(BoU) on 20 October 2016, after it failed to comply with a capital call on 1 July 2016. On 11 February 2022 the Supreme Court dismissed Bank of Uganda’s appeal against

Sudhir Ruparelia Sudhir Ruparelia (born 17 January 1956) is a Ugandan business magnate and investor. He is the chairman and majority shareholder in the Ruparelia Group companies. His investments are mainly in the banking, insurance, education, broadcasting, re ...

and Meera Investments, and ordered the central bank to directly pay costs at all Court levels.

Overview

The bank was a large financial services provider in Uganda. As of 31 December 2015, Crane Bank's assets were UGX:1.81 trillion, with shareholders' equity of UGX:281.43 billion. In October 2015, it had more than 750,000 customers.

History

Crane Bank started operations on 21 August 1995 "with a vision of being the largest privately owned Ugandan Bank." In September 2012, Crane Bank acquired the assets and some of the liabilities of the National Bank of Commerce, a small, indigenous, financial services provider in Uganda that had lost its banking license. On 30 January 2014, Crane Bank established Crane Bank Rwanda Limited, a wholly owned subsidiary, with the first branch in

Rwanda Rwanda, officially the Republic of Rwanda, is a landlocked country in the Great Rift Valley of East Africa, where the African Great Lakes region and Southeast Africa converge. Located a few degrees south of the Equator, Rwanda is bordered by ...

opening to customers on 30 June 2014.

Ownership

On 27 January 2017, DFCU took over the bank, which had been under the statutory management of the BOU because the bank's liabilities exceeded its assets. The acquisition included all customer deposit accounts and loan accounts. The bank was previously a member of the

Ruparelia Group The Ruparelia Group of Companies, commonly referred to as the Ruparelia Group, is a privately owned Conglomerate (business), conglomerate in Uganda. Sudhir Ruparelia, a wealthy Ugandan businessman, is a shareholder in each of the companies in t ...

. In September 2013, Ugandan print media reported that the bank's stock would be listed on the

Uganda Securities Exchange The Uganda Securities Exchange (USE) is the principal stock exchange of Uganda. It was founded in June 1997. The USE is operated under the jurisdiction of Uganda's Capital Markets Authority, which in turn reports to the Bank of Uganda, Uganda's ...

in 2014. Those plans, however, were put on hold, with the bank explaining at the end of 2014 that it was focusing on its expansion plans first. In September 2016, Ugandan print media indicated that the bank was actively searching for a strategic partner to acquire shares in the bank. In October 2016, the potential strategic partner was identified as Bob Diamond of the

Atlas Mara Limited Atlas Mara Limited, formerly referred to as Atlas Mara Co-Nvest Limited, is a financial services holding company formed to undertake the acquisition of target banks in Africa. The Group's headquarters are located in Tortola, British Virgin Island ...

. Negotiations were still ongoing as of 11 October 2016. On 20 October 2016, the BOU took over the management of Crane Bank and started a sale process. The thirteen bidders included DFCU,

Barclays Bank of Uganda Absa Bank Uganda Limited, formerly known as Barclays Bank of Uganda Limited, is a commercial bank in Uganda. It is licensed by the Bank of Uganda, the country's central bank and national banking regulator. The bank is a subsidiary of Absa Group ...

, First National Bank of South Africa, Ricardo Santos Silva of Aethel Partners Limited of the

United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Northwestern Europe, off the coast of European mainland, the continental mainland. It comprises England, Scotlan ...

, and General Equity, a New Zealand-based fund. On 20 October 2016, the BOU took over the management of Crane Bank, suspending its board and acting CEO. This seizure was related to the bank's under-capitalization. Edward Katimbo Mugwanya was appointed statutory manager and reported directly to the governor of BOU. In January 2017, DFCU acquired Crane Bank. DFCU Bank had offered to recapitalise Crane Bank with US$21.6 million after take-over and Aethel Partners Limited offered UGX:1 for the bank's assets and liabilities and also committed to invest US$215 million in Crane Bank to clean the balance sheet. Whereas DFCU Bank offered to clear all of Crane Bank's verified debts, Aethel Partners insisted it would clear only part of the failed lender's debts because of the severe corporate governance and

financial risk Financial risk is any of various types of risk associated with financing, including financial transactions that include company loans in risk of default. Often it is understood to include only downside risk, meaning the potential for financi ...

s tied to the bank. These factors boosted DFCU's bid.

Controversy

The "Report on the preliminary forensic review at Crane Bank" (December 2016), which was authored by

PricewaterhouseCoopers PricewaterhouseCoopers, also known as PwC, is a multinational professional services network based in London, United Kingdom. It is the second-largest professional services network in the world and is one of the Big Four accounting firms, alon ...

and commissioned by the Bank of Uganda, recommended the prosecution of Crane Bank's board of directors, investors, and senior management for allegedly flaunting Uganda's banking laws and allegedly committing various financial crimes.

References

External links