Dfcu still owns former Crane Bank properties despite vacating - BoU

Dfcu Bank is still the leasehold owner of the former Crane Bank premises despite vacating a number of disputed properties under Meera Investments, according to Bank of Uganda.

At the start of this month, dfcu started relocating some of its branches in a move that the bank yesterday said sought to implement a planned digital system.

Mr. William Ssekabembe, the dfcu executive director, told Daily Monitor yesterday the relocation was “part of our strategy to relocate branches that are inclined to digital, with more services channels lined to meet the needs of the customer”.

“The branch of the future is going through transition and this is not about dfcu alone but the whole banking industry is redefining,” he said, noting that the relocation did not have anything to do with the 48 disputed properties, which Meera Investments says were illegally transferred to dfcu, which in 2017 acquired some assets and liabilities under defunct Crane Bank.

However, in a 2019 Bank of Uganda annual report, dfcu indicated its desire to return 48 disputed properties sold to it by Bank of Uganda following the collapse of Crane Bank.

In the report, Bank of Uganda said dfcu had opted out of the acquisition of the properties held under a Ruparelia Group subsidiary - Meera Investments Limited.

“… dfcu in a letter dated September 12, 2019, communicated … its decision to exercise its option to rescind its interest in purchasing the 48 properties,” the report said, noting that the return of the properties will require “Bank of Uganda to pay to dfcu the net book value of the properties recorded in the assets and inventory compilation report as at October 20, 2016.”

However, no details of the compensation for loss of interest have been availed.

Yesterday, Bank of Uganda Deputy Communications Director Kelvin Kiyingi told Daily Monitor in an emailed statement that whereas dfcu had vacated some of the 48 properties it continues to retain ownership of the said properties.

He also noted that terms under the Purchase of Assets & Assumptions of Liabilities (P&A) agreement conducted between Bank of Uganda and dfcu would apply in the event that compensation for vacated premises arises.

“Dfcu purchased the leasehold interest in these properties, and still retains the said interest, even after physically vacating them,” he said, noting that the return of the leasehold interest was governed by the provisions in the Purchase of Assets & Assumptions of Liabilities (P&A) agreement between the Bank of Uganda and dfcu.

Mr Ssekabembe told Daily Monitor the relocation had been informed by a survey whose findings had suggested that customers needed innovative and insightful client-focused services.

The new branches, he said, have been fitted with digital hubs and smart ATMs, among others.

However, Mr Ssekebembe declined to reveal how much the bank had injected into the project.