Bank of Uganda (BOU) has taken over management of Imperial Bank Uganda, saying the move is a precautionary measure that seeks to protect customer savings.
The takeover follows similar events in Kenya where the Central bank of Kenya placed the operations of the Imperial Bank Kenya under receivership for what the regulator termed as unsafe banking conditions.
In a statement issued on Tuesday, Bank of Uganda said: “Under Section 88 and 89 of the FIA 2004, the BoU has today, (Tuesday October 13, 2015), taken over management of Imperial Bank Uganda Ltd.”
Mr. Mutebile revealed yesterday that BOU had taken over the bank management because of troubles facing the majority shareholders at an emergency press briefing.
“The decision has been taken following the suspension by the Central Bank of Kenya of the operations of Imperial Bank Ltd, who are the majority shareholder of Imperial Bank Uganda Ltd,” the statement added.
The development means that Imperial Bank operations will continue and their services to customers will flow as required but only under the direct control of the Central Bank.
At the close of 2014 Imperial Bank shareholders including Amzal Holdings (a Mukwano Group company) and Imperial Bank of Kenya, mobilised to recapitalise after accumulated losses had eaten into the bank’s core capital to Shs24.1b
Under the law banks are required to hold core capital of Shs25b.
About Imperial Bank
Imperial Bank is a small-sized retail bank that caters to both individuals and corporate clients. In December 2013, the bank’s total assets were valued at approximately US$87 million (UGX:214.65 billion), with shareholders’ equity of approximately US$13.7 million (UGX:34.2 billion).
It was was established in 2011, by two major investors, Mukwano Group, a diversified Ugandan business and manufacturing conglomerate, and Imperial Bank Kenya, a medium-sized financial services provider, based in Nairobi, Kenya, with total assets of about US$498 million (KES:43 billion), as of December 2013.