Tropical Bank boss, Abdulaziz Mansur
The Bank of Uganda has revealed that Tropical Bank Limited is well capitalized after its shareholders injected Shs3.8bn into the financial institution.
In a press statement issued this morning by Adam Mugume on behalf of BoU’s Deputy Governor, the Central Bank acknowledged that Tropical Bank was undercapitalized to a tune of Shs3.8bn and the shareholders moved swiftly to inject the required capital to keep the Bank afloat.
Mugume said that in accordance with section 86 of the Financial Institutions Act 2004, Bank of Uganda had directed the Management of Tropical Bank to submit a Capital Restoration Plan, a directive that was complied to by end of March 2020 with shareholders injecting Shs3.8bn into the Bank.
The Central Bank added that the implementation of the Capital Restoration Plan which runs for six months or 180 days is still ongoing and assured the customers of Tropical Bank’s financial soundness.
“As of today, Tropical Bank Limited is well capitalised and Bank of Uganda reassures the general public that it will continue to protect depositors’ interests and maintain the stability of the Financial sector,” he said.
On May 1st 2020, Tropical Bank Limited published its 2019 financial results indicating that the Bank’s losses had increased by 314.3% to Shs23.95bn in 2019 from Shs5.78bn loss recorded in 2018leaving the bank Shs3.8bn below the minimum capital requirement set by Bank of Uganda.
The bank’s Non-Performing Loans (NPLs) reduced to Shs16.1bn in 2019, down from Shs21.9bn in 2018. This represents the NPL ratio of 5.09%, one of the highest in the market.
In a separate statement, the bank also said it is well capitalized and that it posted profits of over Shs2bn in the first quarter of 2020.
It should be noted that Tropical bank late last year hired Abdulaziz M.A. Mansur as Managing Director to replace Sameh M. Krekshi, who was forced out of the bank in October 2018 after overdrawing his account contrary to BoU regulations.
The move by Bank of Uganda seems to deter Tropical Bank from following fate of the seven defunct Banks including; Teffe Bank, Global Trust Bank, Cooperative Bank, National Bank of Commerce, Greenland Bank, Crane Bank and International Credit Bank Limited.