GTBank Uganda’s transition to Credit Institution aligns with our core strengths in Retail, SME banking – Adeniji

Mr Jubril Adeniji, Managing Director of Guaranty Trust Bank Kenya and Head of East Africa, said the reclassification of GTBank Uganda from a Tier 1 Commercial Bank to a Tier 2 Credit Institution aligns with its core strengths in Retail and Small and Medium Enterprises Banking.

Adeniji disclosed this in a statement to DAILY POST on Wednesday.

Recall that the Bank of Uganda had recently approved the request by GTBank Uganda and two other banks to transit from Tier 1 Commercial Bank to Tier 2 Credit Institutions.

Commenting on the development, Adeniji stated, “Continuing operations as a Tier 2 Credit Institution is within the Bank’s current capital base and will allow us to play to our core strengths in Retail and SME Banking. As we transition, we will continue to review our positioning within the Ugandan banking sector to ensure that it aligns with our objective of maximizing shareholder value.”

He further added, “As a Group, we are confident of Uganda’s trajectory as a country and remain committed to championing growth and expanding innovative financial services across Africa and will continue to explore viable opportunities in both existing and new business verticals that guarantee the best use of available capital.”

Recall that on 30 June 2023 – Guaranty Trust Bank (Uganda) Ltd (“GTBank Uganda”) announced its intention to transition from a Tier 1 Commercial Bank to a Tier 2 Credit Institution.

Accordingly, the bank explained the reclassification position has become necessary given the Bank’s current paid-up share capital position of UGX 41 billion (approx. USD 11.02 million) and the recent increase in the minimum paid-up share capital requirement for Tier 1 Commercial Banks operating in Uganda to UGX 120 billion (approx. USD 32.26 million) effective 31 December 2022, and subsequently to UGX 150 Billion (approx. USD 40.32Million) by 30 June 2024.

“In November 2022, the Ministry of Finance, Planning and Economic Development, in conjunction with the Central Bank of Uganda, prescribed new thresholds for minimum paid-up share capital unimpaired by losses for Supervised Financial Institutions (SFIs) in Uganda.

“Following extensive engagements with all stakeholders, including the regulator and our shareholders, we believe that this is the right decision considering global economic realities, and it is fully aligned with the objectives of our Holding Company -– “to direct resources to opportunities in alignment with our current strategy of evolving the Guaranty Trust Brand to a full-fledged Financial Services Group”.

The Bank said it has thoroughly reviewed its existing customer base and put adequate measures in place to meet their banking needs pending final regulatory approvals and further directives by the relevant parties.

“We expect the transition to be seamless and commit to continuing compliance with all guidelines and best practices throughout the change process”, it stated.