Bank of Uganda has approved a request by Afriland First Bank Uganda Limited to apply to the High court for voluntary liquidation (a self-imposed wind-up and dissolution of a company by its shareholders), deputy governor, Michael Atingi Ego has announced.

According to Atingi Ego, Afriland's decision for Voluntary Liquidation was an outcome of a strategic business review by the shareholders; Afriland First Group. He however noted that Afriland First Bank Uganda Limited is a solvent financial institution and therefore all depositors and other verified creditors shall be paid in full.

"All depositors of Afriland First Bank Uganda Limited are encouraged to withdraw their deposits from Afriland First Bank Uganda Limited's premises. All other verified creditors shall be paid in full by the liquidator that has been appointed by shareholders of Afriland First Bank Uganda Limited," the deputy governor said.

Afriland First bank was issued a commercial banking license class 1 on 12th September 2019. However, due to the Covid-19 pandemic, the bank officially commenced operations on December 1, 2020.

By the time its shareholders made the decision for voluntary liquidation, the bank had not issued any single loan. Currently, the bank holds liquid assets of Shs 31.458bn against total liabilities of Shs 11.31bn. Of the Shs 11.31bn, Shs 958m are deposits while Shs 8.2bn are borrowings from shareholders and other entities.

"The bank is a solvent institution which means that the assets it has are more than adequate to meet all the liabilities it has. So the bank is in a position to pay off all its obligations in the near to medium term because as Bank of Uganda, our main concern during such an exercise (voluntary liquidation) is to make sure that the entity is solvent so that it doesn't leave any debts behind when exiting the market," said Tumubweine Twinemanzi, the director of supervision at the Central Bank.