The affairs of an entity in receivership take a long time to resolve. It will be a long sunset for Crane Bank, its owners and Bank of Uganda. The Central Bank has put Governor Emmanuel Tumusiime-Mutebile on a public relations offensive to justify the closure of Crane Bank and explain away its lax regime that allowed Crane Bank to sink deeper into an abyss from which it could never recover.
Crane Bank has been covered from many angles. Its collapse marked the height of a major crisis in which banks made losses from non-performing loans. The failure of big loans like Steel Rolling Mills, a $50 million loan at Standard & Chartered, was one of them. The highly publicised bailout list shortly after the February 2016 elections where most of the items on the list had contributed handsomely to the campaign of President Museveni turned heads in town.
The New Vision has done good coverage of how one borrower was uniquely treated after fleeing from her creditors and successfully getting Shs64 billion on favorable terms from government.
In fact, if just two or three of Crane Bank’s bad loans performed, the story would be different. The rise in the toxic loans portfolio partly arose from BoU’s laxity allowing a rogue interest rate regime to reign in the banking sector.
In its bid to mop inflation, BoU raised the CBR to the high teens to mop out election inflation pressures. Commercial banks raised their lending rates to as high as 29 per cent to […]