Afriland bank withdraws after two years of activity

Bank of Uganda said Afriland First Bank applied to voluntarily leave Uganda just over two years after being granted a license in September 2019.

The bank, according to Central Bank details, has not administered any credit or loan in the past 16 months in Uganda.

This could partly explain his exit decision, aggravated by the difficult economic conditions induced by the Covid-19.

Announcing the exit yesterday, Bank of Uganda Deputy Governor Michael Atingi-Ego said Afriland’s decision to go into voluntary liquidation was the result of a strategic review of the business by the shareholders – Afriland Group.

The Bank of Uganda, he said, on Wednesday May 25 approved Afriland’s application to go to the High Court for voluntary liquidation.

However, he added, Afriland was a solvent financial institution, which therefore means that all depositors and other verified creditors will be paid in full.

Afriland, according to Bank of Uganda, has a market share of 0.08% and total deposits of 958 million shillings.

The Ugandan banking space is highly saturated, which presents fierce competition and a requirement for huge investments.

The exit of Afriland brings the number of commercial banks operating in Uganda to 25 from 26.

Bank of Uganda Executive Director for Supervision, Dr Tumubweine Twinemanzi, said yesterday that while Afriland had managed to mobilize some deposits in the 16 months of its operation, it had not administered any credit.

Afriland, Dr Tumubweine further noted, had by December 2021 accumulated an asset base of Shs 31.4 billion, liabilities of Shs 11.13 billion and equity of Shs 8.2 billion, while that other liabilities amounted to Shs. 2 billion.

Asked about the impact of the exit on the financial market, Dr Twinemanzi said there would be little or no impact since the bank held a very small market share, noting that Afriland had started operating in Uganda in a time when the economy was disrupted due to Covid-19, which could have impacted its results.

Afriland officially started operations on December 1, 2020, about three months before the economy went into lockdown due to Covid-19.

The economy was then shut down again in June 2021, before being fully reopened in January 2022.

Dr Twinemanzi also noted that while Afriland will close in Uganda, its operations in other countries will continue to operate. Afriland is present in Cameroon, DR Congo, Equatorial Guinea, Guinea, Liberia, South Sudan, São Tomé and Príncipe and Zambia.

Comments are closed.