KAMPALA – Four top officials including the Executive Director have reportedly resigned from Tropical Bank amid management unrest at the institution.
According to a highly placed source within the bank, those who have handed in their resignations include the Executive Director Denis Muganga Kakeeto, Hussein Sentamu, the Head Credit Department and a one Maurice the head of operations.
Accordingly, there is reported infighting for top jobs within the top bank management.
“There are two groups, the one that is led by our Managing Director (MD) and this one that has been forced out,” says the source.
The Managing Director Abdul Aziz Manusul could not be reached for comment about the latest developments but it is understood that he has enlisted the support of senior members of the team including Caroline B. Ogwang, the Head of Compliance and Joweria Mukalazi the Acting Executive Director.
It is said Ms Ogwang was disappointed that Mr. Kakeeto had been named Executive Director ahead of her, when she had previously acted in the role.
The subsequent battles over positions has led the bank to struggle because of lack of liquidity as result of working in losses for the last 2 years.
It has also been confirmed that the Executive Director Supervision Bank of Uganda is already auditing Tropical bank books of accounts after its capital was depleted in Central bank despite efforts to recapitalize it because of none performing loans.
The bank became under-capitalized after it posted the biggest loss in the banking sector this year.
The bank which first opened in the country in 1973 as Libyan Arab Uganda Bank is now below the required minimum capital by UGX. 3.8 billion according to audited results.
Commercial banks are expected to have at least UGX 25 billion as minimum capital. With the bank under capitalized and unprofitable – it made a loss of UGX. 23.9 billion in 2019 from 5.7 billion in 2018.
According to KPMG, an audit firm that audited the bank’s accounts, Tropical bank’s situation points to the fact that “material uncertainty exists which cast significant doubt on Tropical Bank Limited’s ability to continue as a going concern” A going concern is a business that is assumed will meet its financial obligations when they fall due.
Tropical bank is 99% owned by Libya. The bank was in 2011 – at the height of the uprising that ousted former Libyan leader Muammar al-Gaddafi – handed over to Bank of Uganda after a resolution by the United Nations Security Council to declare a freeze on all Libyan assets in foreign territories.
In 2018, the bank’s then managing director Kreshi Sameh Mahmud was terminated and ordered to handover office immediately. Abdulaziz was appointed in the position.
Last year results show the bank holds Shs 43 billion in cash with Bank of Uganda – this is the money drawn for the needs of its customers.
It’s loans to customers grew to UGX. 180 billion in 2019 from UGX. 128 billion in 2018.