UNCERTAINTY AT BANKRUPT TROPICAL BANK AS FOUR TOP MANAGERS QUIT
By Mulengera Reporter
All is not well at Tropical Bank Uganda after Executive Director Denis Muganga Kakeeto led other three top managers to throw in the towel as the financial institution struggles to meet its obligations and keep afloat.
There has also been fierce infighting within the bank as top managers threatened to tear each other into pieces to rise to the top. It is such internal strife and the bank’s financial struggles that have become unbearable for ED Kakeeto, Head Credit Department Hussein Sentamu, and head of operations, prompting them to hand in their resignation letters.
The infighting, knowledgeable sources say, sharply divided management into two rival gangs, with Managing Director Abdul Aziz Manusul, Head of Compliance Caroline B Ogwang and Acting Executive Director Joweria Mukalazi teaming up to throw out Kakeeto and his allies in the bank owned by the Libyan government through the Libyan Foreign Bank. Ogwang has been cited as one of those ruthlessly fighting Kakeeto so that she can bounce back to the position he took away from her.
While the Kakeeto group claim they are pushing to clean up the rot and help the bank get back on its knees, especially since it has struggled almost a decade since the demise of Libyan strongman Col Muammar Gadaffi.
Inside sources further told this publication that the bank was in a liquidity crisis after enduring losses and non-performing loans in the past three years, something which Dr Tumubweine Twinemanzi, the Executive Director Supervision Bank of Uganda, rode on to order KPMG to carry out an audit into the bank’s accounts after it kept struggling despite the central bank’s capitalisation efforts. Audit results indicate that the bank is Shs3.8bn below the minimum capital requirement of Shs25bn. Its losses have also become more worrying, rising from Shs5.7bn in 2018 to Shs23.9bn last year.
As of 2019, Tropical Bank had only Shs43bn in the central bank as the only cash it could use to meet customer needs, while its loan figure rose from Shs128bn in 2018 to Shs180bn the following year, thanks to the bank’s appetite to lend to few big borrowers (who took Shs114bn in loans, further increasing its risk). To be able to bolster its minimum capital and stay in business, Tropical Bank might not only have to sell its assets (whose value jumped from Shs289bn in 2018 to Shs316bn in 2019), but might require more interventions from the central bank, including more capitalisation.
KPMG has reportedly told Dr Twinemanzi that “material uncertainty exists which cast significant doubt on Tropical Bank Limited’s ability to continue as a going concern,” adding that “the COVID-19 outbreak affects the bank and results in certain uncertainties for the future financial position and performance of the bank.”
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