Global Trust Bank closure: The inside story According to reliable sources, the owners of CMF are said to have sold off their shareholding in the microfinance when it was already in the red. Given their influence and some luck, the shareholders managed to inflate the price. The buyers (GTB owners) did not undertake a thorough due diligence. Uganda had just discovered viable commercial oil reserves and the future seemed bright, especially for banking. The Nigerians, angry for the Ugandan market, missed obvious steps before committing such investment. They are said to have settled for a gentlemen’s words which were not gentle at all. The financial institution was already stripped, with a bad portfolio and governance systems with no going concern prospects. The microfinance’s reputation was poor; the reasons the buyer did not want to associate with the brand after acquisition and integration. CMF had registered a loss of Ugx 193 million in 2007, up from Ugx 173 million the year before and it needed a quick turnaround. The second largest microfinance by assets and branch network was also weighed down by a huge expense bill that hit Ugx 173.9 million in 2006 and then Ugx 193 million in 2007. The microfinance had more issues. The company’s figures showed that the provision for bad loans and doubtful debts had grown from Ugx 403 million in 2006 to Ugx 1.7 billion in 2007. All these were red flags. sbreview.net/index.php/2013-04-23-09-17-05/economy/1074-global-trust-bank-closure-the-inside-story
Posted on: Fri, 05 Sep 2014 18:25:54 +0000
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