Bank of Uganda (BoU) has played down the possibility of Crane Bank collapsing, leaving it with no assets and depositors.
It has been a month since BoU took over the management of Crane Bank to avoid an eventual collapse that was brought about by high levels of non-performing loans (NPLs).
Mr Emmanuel Tumusiime-Mutebile,the BOU governor, while speaking at the Annual Bankers Dinner in Kampala on Friday, revealed that it was because of the high NPLs at Crane Bank that they had to intervene.
“The cause of Crane Bank’s distress was actually NPLs, which had risen to more than 20 per cent of its loan portfolio and which left it significantly undercapitalised. Because it is a systemically important bank, we intend to resolve Crane Bank in a manner which preserves its core functions and services to customers”. Mutebile said.
Mr Mutebile revealed while delivering the keynote address. In saying that, the Governor indicated that at least BoU had established why Crane Bank became significantly undercapitalised and that it was not enough to warrant a bank failure. “So, those of our people who claim that the bank has collapsed are fools. The bank is alive and well, if not kicking,” he added.