24 November 2012

Uganda: Managing a People's Bank


Crane Bank, one of the biggest banks in the country, is implementing an expansion strategy that will see it grow its foot print to 40 branches countrywide by end of 2013. The Managing Director, A.R Kalan, spoke to Peter Nyanzi about their operations.

Crane Bank, an indigenous bank, is now bigger than several international banks in Uganda. What have been the key drivers of this tremendous growth?

We started in August 1995 with one branch. The branch expansion strategy aimed at expanding our footprint in Uganda has started to show results. Today, Crane Bank has 26 branches across the country. This has been one of our core priorities because of the rapidly growing need across the country for first class financial services.

Our aim is to have 50 branches by 2015 and 40 by the end of 2013. Additionally, we have a very strong board with a forward-looking vision and dedicated members of staff who form strong pillars of the bank as well as many loyal customers who have been our biggest driver for our growth.

The majority of banks in Uganda have most of their presence in Kampala. What keeps financial institutions away from the rural areas?

It's because of the high costs involved in operating upcountry branches. Most banks realized that 70% of the economic activities in Uganda take place in Kampala. What is you see upcountry is a very tiny portion of the business but the costs associated with operating branches in the rural areas is very high.

So most banks are content to have their branches in Kampala. Our strategy is different. We would like to be more accessible and to take services closer to the people instead of expecting the people to come to the bank. Also, we are popularly known as the 'people's bank' so we want to reach as many people as possible countrywide.

You recently opened a new branch in Hoima. To what extent does that underpin your strategy for the oil region?

We have a five-year strategic plan and Hoima was part of that strategy - long before even the oil thing came in. So, it's not that we are going to Hoima because of the oil. Of course it is a bonus for us that there is oil in the region and we want to capitalize on it to offer services oriented to the oil sector.

How come Crane Bank is not yet an international bank? Any expansion plans for the EA region?

We want to be a regional bank by expanding to Rwanda, South Sudan and DR Congo. We already have the licence for DR Congo but we are waiting for the political situation to stabilise. We are in advanced stages to finalize our licence in Rwanda though I will not be able to give a time frame because it goes through a long process.

How do you want to see Crane Bank in the next 3-5 years?

We want to see it as the Number One bank in Uganda. The community and the Diaspora should be able to enjoy the services of a strong indigenous bank with international standard financial services at affordable rates.

Do you hope to list on the stock market in one these years?

That is something the shareholders will have to decide; because Crane Bank is one of the most capitalized bank in Uganda, and the only bank with a paid up capital of over Shs 100 billion and capital in reserves of over Shs 250 billion. So the shareholders would decide to list the shares but I think yes it is something that should happen in the future.

Now that the CBR is down to below 13%, should we conclude that the economic challenges of the past 12 months are now behind us?

The interest rates have been coming down and the liquidity in the market has been quite tight. But we have seen a lot of improvement as the interest rates are starting to come down but the year is also coming to an end so we hope that 2013 will be a better year for our customers.

What is your reading of the economic outlook for Uganda in the short/medium term?

Uganda has got a stable political and economic stability and we see a lot of investments from abroad and the region, which is an indication of confidence in the economy. Also, we hope the oil production would start soon to be an incentive for the economy. I believe Uganda has a very bright future ahead.

Your last word?

I would like to appreciate the board of directors for the guidance and the long-sighted vision and the regulatory agencies as well as our 1,000 employees. I look forward to the continued support to enable us to achieve our moto of 'serving to grow and growing to serve.'

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