Uganda: Crane Bank Wrote Off $27m in Bad Loans, Says Report

Kampala — Crane Bank wrote off more than 180 loans and advances amounting to more than Shs101b, a preliminary report of a forensic investigation prepared by the audit firm PricewaterhouseCoopers on behalf of Bank of Uganda shows.

The loans, according to the report, were written off separately in the period running between 2005 and 2016, with the largest write-off (40 loans) happening in 2013.

A loan is written off after it has been deemed unreasonably difficult to collect.

Therefore, it becomes nonperforming and is removed from the bank’s loan book to reduce overall tax liability.

The report, however, suggests that some of the loans were irregularly written off, including those to Megabells Electronics, Infinity Investments, and Ssebagala & Sons Electro Centre.

The report says the three companies were repeatedly loaned money even when it was clear to the bank that they would not repay.

More than Shs21b was written off in the case of Megabells Electronics whereas Shs20b and Shs8b were written off for Infinity Investments and Ssebagala & Sons Electro Centre, respectively. Beneficiaries The three companies are part of the 11 that are listed as having benefited from the large write-offs which stood at Shs101b between 2005 and October 2016.The 11 companies held 92 per cent (24 loans in number) of the written off loans which represented more than Shs92b of the bank’s loan book of Shs101b between the period under review.The inquiry into written off loans stems, according to the report, from suspicious transactions on some of the companies’ accounts.

Leave a Reply

*