The Observer (Kampala)

Uganda: Crane Bank Aims for the Sky

Indigenous bank opens 12 branches this year, turns to Juba, Kigali, Congo The opening of its Entebbe branch last week marked a new high in the rapid expansion drive of Crane bank. No commercial bank in Uganda today has been expanding at the same pace in terms of branch network.

This year alone, the bank has opened 12 new branches across the country, including Makerere, Hoima, Soroti, Kisoro, Masaka, Kyambogo University, Naalya and Entebbe. This brings the total number of their branches to 27.

The bank, owned by businessman Sudhir Ruparelia, who was recently ranked the richest man in East Africa by Forbes magazine, has discovered its ambitious touch in the last couple of years and is set to become the first Ugandan-owned bank to venture outside the borders when it opens up in South Sudan, Rwanda and possibly Democratic Republic of Congo in the near future.

At the start of this year (2012), Crane bank had an annual target of establishing 10 more branches across the country. This was part of the bank's five-year customer excellence strategy aimed at establishing at least 50 branches by 2015. Yet before that, the bank had only managed about 15 branches in 15 years, which has given critics of its fast expansion some ammunition.

Bringing services closer

But Crane bank is determined to make critics eat their words, having established a strong customer and asset base to buttress the extended branch network. While opening the latest branch in Entebbe last week, A. R. Kalan, the managing director, said they would open up even more branches to match their strategic plan of bringing services closer to the people. He said their branch expansion approach was paying dividends through a rapid customer base growth.

The Governor of Bank of Uganda, Emmanuel Tumusiime-Mutebile, who presided over the ceremony, praised the bank's management for their rapid expansion approach, which he said is good for the banking sector as it promotes competition.

Mutebile noted that Crane bank has not only expanded its branch network but also its asset base which he said had surpassed Shs 1 trillion mid this year, making it the fourth bank in the country to hit that mark.

While opening the Hoima branch earlier in October, Kalan said: "Our very foundation sits on being a bank for every need and every person. We thus set ourselves a very ambitious strategy of opening shop in every major town in Uganda by 2015." Joseph Luyimba, a customer, approves of the bank's strategy.

"I think this bank has realised one thing that they had failed to do for years - that is outreach. Their products and services are very good but they were concentrating in urban areas," he said.

Strength in assets

Crane bank has reason to be buoyant because as of December 2011, it was the largest indigenous bank in Uganda, with an asset valuation of approximately $388m (Shs 961.5bn), and shareholder equity in excess of $62m (Shs 142bn).

Centenary bank, their biggest indigenous rival, last year posted an asset base of about $381.3m (Shs 944bn), with shareholder equity in excess of $57m (Shs 140bn).

However, Centenary bank remains the largest indigenous bank in terms of outreach, with at least 60 branches and 115 automated teller machines across the country.

But at this rate of expansion, Crane bank is closing in. And the world has taken note. For instance, Crane bank has for seven of their 17 years of existence been named "bank of the year" by the United Kingdom's Financial Times (2003, 2005, 2006, 2007 2008, 2009 and 2011).

But it is setting up abroad that will cement Crane bank's position in the industry and separate boys from men, so to say. While opening the bank's 23rd branch in September this year, Kalan confirmed that they would soon enter the Democratic Republic of Congo, Rwanda and South Sudan markets.

Apart from the defunct Greenland bank, which had regional ambitions and managed to set up in Tanzania before collapsing, no other Ugandan bank has had a presence in another country.

Although there are perhaps a lot more Ugandans doing business in South Sudan than Kenyans, the new economy is served by mainly two Kenyan banks: KCB and Equity. Kalan calls it "sowing seeds for the future." But for Crane bank, the future appears to be here already.

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