Tropical bank turnaround isn’t about to happen. The troubled financial institution continues to post losses.
Tropical bank 2019 financial results show that the bank’s losses increased by 314.3% Shs23.95bn in 2019 from Shs5.78bn loss recorded in 2018. The bank has been recording losses for four successive years.
However, the bank’s total assets increased by 9.1% to Shs316.13bn in 2019, up from Shs289.54bn recorded a year earlier.
Loans advanced to customers also increased to Shs180.4bn in 2019, up from Shs128.7bn, representing a growth of 40.17%.
On another positive note, customer deposits increased by 22.35% to Shs223.44bn in 2019, up from Shs182.62bn recorded a year earlier.
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.
The bank’s bad loans written off reduced to Shs14.2bn in 2019 from Shs17.06bn in 2018.
What is more worrying however is that the bank’s capital is almost Shs4bn below the minimum capital requirement set by the Bank of Uganda (BoU).
Tropical Bank’s Core capital reduced to Shs21.1bn in 2019, down from Shs27.75bn in 2018.
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.
It remains to be seen what Mansur and Dennis M. Kakeeto, the Executive Director of the bank have in store on how to turn around the seemingly troubled financial institution.
Addressing the corporate customers at a dinner held at Hotel Africana on Thursday 26th September 2019, Mansur, a seasoned banker, sounded positive about the future of the bank.
“When the Bank was established in 1973 as a joint venture between the government of Uganda and Libyan Foreign Bank, its main objective was to support trade and development in Uganda and provided support in foreign trade with the outside world,” Mansur said.
He added: “This is still our objective and I have come here as the new Managing Director of Tropical Bank to re-enforce this vision. We strongly want our customers and their businesses to flourish and be successful. If our customers fail, so shall we as a Bank.”
Credit: businessfocus.co.ug
