The Bank of Uganda (BoU) governor Emmanuel Tumusiime Mutebile, at a Press briefing in Kampala this morning, confirmed that  DFCU bank has taken over Crane bank.

The governor told a news conference this morning that all customers and depositors of Crane bank shall now have their accounts operated by Dfcu bank through its wide branch network.

Mutebile said, that after thorough vetting, Dfcu emerged the winners among the 13 institutions that bid for Crane bank.

“In exercise of its powers as receiver, under section 95 (1) (b) of Financial and other Institutions Act, Bank of Uganda has now transferred the liabilities including deposits of Crane bank to Dfcu bank.”

“Bank of Uganda reassures the public that it will continue to protect depositors’ interests and maintain the stability of the financial sector,” the governor said.

In exercise of its powers under Section 87(3), 88(1)(a) & (b) of the Financial Institutions Act 2004, Bank of Uganda on September 20, 2016 took over the management of Crane bank and issued a notice to the public setting out the reasons for the takeover.

Troubles for the local lender came to the fore last year when it was revealed the bank was looking for a “strategic equity investor”. Then, its majority shareholder, businessman Sudhir Ruparelia tried to ward-off talk the bank was in trouble.

According to Bank of Uganda governor Emmanuel Mutebile, Crane Bank was under-capitalised and posed systemic risk to the banking sector. However, since then, the bank remained open to customers under the management of Bank of Uganda.

Though Crane Bank has steadily posted impressive financial results since it began operations in 1995, a surge in default rates from trade financing and small and medium-sized enterprises (SMEs) segments eroded its earnings, resulting in a net loss of Ush3 billion ($872,068) in 2015 – its worst performance yet.

Its bad loans alone accounted for a fifth of the sector’s bad assets.