Tropical bank 2019 financial results show that the bank’s losses rose by 314.3% Shs23.95bn in 2019 from Shs5.78bn loss recorded in 2018.
The bank has been recording losses for four recurring years.
The bank has become under-capitalized after incurring the biggest loss in the banking sector this year.
Regarding the audited results published on Friday, the bank is now below the must-have minimum capital by Shs 3.8 bn.
As far as the banking sector is concerned, a commercial bank is expected to have at least Shs 25 bn as minimum capital which is not the case for Tropical Bank at this time.
However, the bank’s total assets increased by 9.1% to Shs 316.13bn in 2019, up from Shs289.54bn recorded a year earlier.
On the other positive side, customer deposits increased by 22.35% to Shs223.44bn in 2019, up from Shs 182.62bn recorded a year earlier.
Loans advanced to customers also saw an uplift to Shs180.4bn in 2019, up from Shs128.7bn, representing a growth of 40.17%. This should ordinarily be a good thing if the bank can collect these debts and interest.
Also, 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.
According to KPMG, an audit firm that audited the bank’s accounts, Tropical bank’s situation points to the fact that “material uncertainty exists which cast significant doubt on Tropical Bank Limited’s ability to continue as a going concern,” reports carried by a local media noted yesterday.
At this stage, the bank needs an immediate recovery by injecting in money as fast as possible to avoid a huge downfall otherwise it risks being sold off.
The auditors’ voice cited that “the COVID-19 outbreak affects the bank and results in certain uncertainties for the future financial position and performance of the bank. “
In 2019, results show the bank holds Shs 43 Bn in cash with Bank of Uganda, this is the money drawn for the needs of its customers.
Further, trusted sources have also revealed that the bank gave out big borrowers money amounting to Shs 114 Bn, a situation which puts it at stake in case they fail to pay back.
Abdulaziz M.A. Mansur managing director, while addressing the corporate customers on Thursday 26th at Hotel Africa showed confidence about the bank’s expected recovery in the short future.
“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,” Abdulaziz M.A said.
“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,” he added.
99.7 per cent of the share capital of Tropical Bank is owned by the Libyan government through the Libyan Foreign Bank. The remaining 0.3 per cent is owned by the government of Uganda through the Ministry of Finance & Economic Development.
Tropical Bank is governed by a six-person board of directors, of whom two are executive directors and four are non-executive. Amb. Moses Kiwe Ssebunya , one of the non-executive directors, is the chairman of the board. Abdulaziz M.A. Mansur is the managing director and Dennis Mugagga Kakeeto is the Executive Director. Three other managers assist him in running the bank.