By Patrick Kagenda
Crane Bank registered tremendous growth in its asset base on top of growing its lending portfolio. The Independent’s Patrick Kagenda talked to the bank’s managing director A.R.Kalan.
Crane Bank made Shs 25.88 billion in profits in 2008 even as the global financial meltdown hit most businesses. Your 2008 profit increased by 61.42% after tax from Shs 16.03 billion in 2007. To what do you attribute this?
The bank managed to break through as a result of the resilience of the Ugandan economy and robust financial system that withstood the ripples of the global financial meltdown. Our biggest contributor to growth was the increase in the lending portfolio by a whopping 44.44% to Shs 208.79 billion in 2008.
Over the same period, our extremely low non- performing assets to total advances ratio shifted slighted to 0.54% in 2008 from 0.58% in 2007. Again on the upside, the customer deposits grew by 17.8% to Shs 341.56 billion in 2008 from Shs 290.02 billion in 2007. The bank’s capital reserves also increased by 43.49% to Shs 75.01 billion in 2008 from Shs 52.27 billion in 2007.
What brought all this success to you?
I think it’s a combination of factors, first it’s due to the long term planning. The vision of the board is on a long term basis. We also have a dedicated loyal staff and loyal customers because we believe in customer satisfaction and customer service.
Is this reason enough for your breaking through the stifling competition in the banking sector with 26 commercial banks not including the 4 MDI`s and myriad micro finance institutions ?
We have been applauded and commended for bringing the un-banked segment into banking, we have been very innovative and we make tailor-made products for our customers and we also look forward to bringing services closer to the people because customer satisfaction is of atmost importance to us. At Crane Bank we do not have any bureaucracy, we are not shy to lending and our strategy is to support SME`s and trade finance and that’s where our expertise lies.
As a local bank what does all this mean to you?
Our board policy is not to put money into treasury bills. The policy of the bank is always to lend out to our customers and we have been growing our lending book substantially and that’s how the bank has grown from strength to strength.
How do you expect to perform this year?
Fortunately, we are insulated from the toxic debt of the western world, though there will be ripples that will affect the Ugandan economy but the strong robust supervision that we have had from the Bank of Uganda is helping insulate the financial sector from the toxic waste that the western world was open to. We do not have any sub prime loans and the supervision here at the bank is very strong and it has helped the bank come out very strong.
You say you do not have sub-prime loans. However Uganda is growing a fast real estate sector. Will Crane Bank go for mortgage financing?
Of course crane bank will be going into mortgage financing though presently we are not doing it. However we are building up the product and very soon we will be coming up with mortgage financing. As in all products where Crane Bank has been innovative, the bank will come out with a tailor-made product for its customers.
The East African Common Market Protocol is in its final stages. What plans does Crane Bank have when the region becomes one common market?
Crane Bank is in advanced stages of increase its branch coverage from eight to 15 so as to have a nationwide coverage. We intend to have a larger geographical footprint in Uganda but also to go regional. In Uganda we have opened up branches in Kireka, Kabale, Mbarara and we plan to open up in Arua, Soroti and Hoima. And the regional plans are to go to Rwanda, Southern Sudan, and the DRC. Crane Bank’s next step is to go regional. The bank is also in process of introducing internet banking, and telephone banking products this year.
How do you plan to deal with the growing competition at home and out there when you go regional?
Competition is always healthy and Crane Bank has always geared up and prepared for fair competition; the more the competition, the better the services and the products that are going to be brought in by the players.