treat http://consumermedsafety.org/components/com_k2/views/itemlist/tmpl/tag.php geneva; font-size: small;”>The action rattled the nation, order http://coparmex.org.mx/wp-content/plugins/jetpack/json-endpoints/class.wpcom-json-api-list-posts-endpoint.php with observers wondering how BoU could take such a drastic move in a matter of hours.
patient http://chienyenthinh.com/components/com_newsfeeds/helpers/route.php geneva; font-size: small;”>Insiders told Chimpreports today morning that the Central Bank sent NBC a letter at noon that they were taking over.
“One hour later, Crane Bank walked in that it had bought deposits, then it sacked all senior management,” recounts a source at NBC.
“In short, Bank of Uganda yesterday, took over the bank, liquidated it, separated assets and liabilities and then sold assets within one hour?” wondered an official at the bank.
The Deputy Governor Louis Kasekende yesterday said the continuation of the bank’s activities was detrimental to the interests of its customers.
But an insider wondered: “If the activities were detrimental, how come all depositors’ cash is safe and is allegedly under Crane now?”
However, in a press statement issued Friday at the bank’s headquarters, Kasekende said the assets and liabilities not transferred to Crane Bank will be placed in liquidation.
“The purpose of the BOU’s intervention was to safeguard the deposits of NBC. This has been achieved. All of the deposits of NBC have been transferred to Crane Bank and NBC’s customers will be able to access their deposits from Monday 1st October; they will be able to maintain deposit accounts in Crane Bank or withdraw their deposits if they so choose,” he elaborated.
In its role as bank regulator, said Kasekende, the primary objective of the BOU is to protect the interests of depositors as far as is possible.
He maintained the interests of depositors take precedence over all other considerations.
“NBC had been suffering financial distress for more than two years. Since the middle of 2010 it had incurred continuous losses. Nearly half of its loans were non-performing,” observed Kasekende.
He said NBC, which is owned by Premier Amama Mbabazi, Amos Nzeyi, Ruhakana Rungunda among others, had achieved no growth since 2008 and its market share of deposits had fallen to 0.08 percent, far lower than any other bank in Uganda. “Had it remained in operation, its losses would have continued to mount, which would eventually have depleted its deposits,” said Kasekende.
“In addition, disputes between the bank’s major shareholders proved to be a serious obstacle to effective governance and management and public confidence in the bank.”
The Central Bank official further stated that closing the bank now, before further losses are incurred, ensures that there are still sufficient sound assets in the bank to cover all of its deposits, thereby allowing these deposits to be repaid in full.
He said the BOU has made repeated efforts to persuade NBC’s shareholders to take the remedial actions necessary to restore the bank to financial viability, including resolving the shareholders’ disputes.
“The limited measures taken by the shareholders, such as injecting new capital, have not been successful in stemming the losses and restoring the bank to viability. As a consequence, the BOU was left with no other option to safeguard the interests of NBC’s depositors than to close down the bank.”