Breaking News: Troubled lender Crane Bank now under Bank of Uganda watch
KAMPALA, OCTOBER13 – Uganda’s central banker, the Bank of Uganda, was keeping a close eye on affairs at troubled lender Crane Bank as the crisis there appeared to be spreading further.
The Bank of Uganda was waiting for the final reconciliation of the lenders cash book today to decide the next move.
Sources at the banking sector regulator confirmed that concern was mounting over what looked like the early signs of a run on the lender and the Bank of Uganda’s supervision department was assessing the situation by the hour.
“We are looking at movements of money across the bank’s network, especially the upcountry branches to get a sense of the extent of the run,” said the source who blamed Crane Bank’s management for failing to manage communication about its search for a strategic partner.
The lender began suffering a slow run on deposits when its customers, mainly Asian traders, began moving their money to banks they considered safer. The panic started when a letter the bank wrote recalling the loans of its top 500 borrowers leaked. The run, initially only in Kampala rapidly became a contagion as Crane’s position quickly evaporated prompting behind the scenes intervention by the Bank of Uganda.
“We have told them it is their responsibility to assure their customers that all is well. In the first place, it was irresponsible of Sudhir to make so many poorly thought-out statements in the media,” commented the source.
Matters have not been helped by the fact that after admitting to a decision to seek recapitalization, Crane Bank has not given progress on its talks with the Bob Diamond’s Atlas Mara Group, leaving a lot open to speculation.
256BN has now learnt that besides issues that have cropped up during due diligence on the value of the lender, Atlas Mara is going through its own shareholder trouble as its Chairman Ashish Thakkar’s marriage troubles increasingly become a public relations problem for the group.
Ashish Thakkar recently downgraded his net worth to just over $0.5 million immediately raising issues about his status in the group that is trying to buy Crane Bank. His estranged wife’s revelation during divorce proceedings in London, that he has a fortune stashed away in tax havens in the British Virgin Islands, does little to help Atlas Mara’s reputation and Bob Diamond is reported to be considering throwing him overboard.