Adieu Crane Bank, viva DFCU
The central banker said DFCU had offered the best bid out of the 13 financial institutions including three Banks that had placed bids for Crane Bank.
BoU placed Crane Bank under statutory management after at the peak of an insolvency crisis. A subsequent audit of the lender revealed massive non-performing loans that were beyond the capacity of shareholder to provision for.
DFCU takes over the bank as a going concern minus toxic assets while it will also have the option of cherry-picking through Cranes 42 branch network. The acquisition brings DFCU’s ranking up in the industry closer to number two by footprint. This is the second acquisition of another lender by DFCU which first took over the assets of Global Trust Bank under a similar arrangement with the Bank of Uganda a few years ago.
“All customers shall now have their accounts operated by DFCU bank through its wide network which will include some of the branches which were formerly branches of crane bank limited,” said BoU Governor Emmanuel Mutebile Tumusiime.
No details were forthcoming over the value of the deal or what would happen to the bank’s subsidiary in Rwanda or to principal shareholder Sudhir Ruparelia who had placed most of the fixed assets of the bank and under sister companies Crane Financial Services and Crane Management Services.
Crane Bank had been courting new investors as it sought new capital but the deals fell through, forcing the central banker to move in to avert an uncontrolled collapse.