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AfricaAugust 31 2008

Big names reeled in by Ugandan rebirth

A rush of new banks, rapid branch expansion by established banks and an emerging mortgage battle are among developments that are enlivening Uganda’s banking scene.
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What a difference a decade makes. Back in the late 1990s, Ugan­da’s banking system was in a mess. Bad loans, many to the well-connected, were running at more than 30%. Several local banks collapsed. One international bank, Barclays, closed 25 branches outside Kampala and was considering pulling out of the country.

Reflecting the prevailing lack of governance, major general Salim Saleh, brother of president Yoweri Museveni, caused a storm with the disclosure that he had secretly purchased government-owned Uganda Commercial Bank, the largest bank in the country by far, through Greenland Bank. In the ensuing debacle, Greenland Bank was put under state management and subsequently closed by the Central Bank because of insolvency and bad debts.

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