Nume Ekeghe
Guaranty Trust Bank (Uganda) Ltd, known as GTBank Uganda, has announced its decision to undergo a statutory reclassification, transitioning from a Tier 1 Commercial Bank to a Tier 2 Credit Institution.
The bank in a statement noted that the move comes in response to the bank’s current paid-up share capital standing at UGX 41 billion, approximately $11.02 million.
It also sais it aligns with the recent regulatory adjustments, including the increase in the minimum paid-up share capital requirement for Tier 1 Commercial Banks operating in Uganda.
Uganda had earlier increased its paid-up share capital requirement December, 31, 2022, for Tier 1 Commercial Banks in Uganda to UGX 120 billion, approximately $32.26 million, and again recently announced that by June 30, 2024, the requirement is set to increase further to UGX 150 billion, approximately $40.32 million.
In light of the regulatory changes, GTBank Uganda has decided to transition to a Tier 2 Credit Institution to ensure compliance and sustainable operations within the evolving financial landscape.
“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,” it said.
Commenting on the development, Managing Director of Guaranty Trust Bank Kenya and Head of the East African region Jubril Adeniji, stated: “Continuing operations as a Tier 2 Credit Institution is within the bank’s current capital base and will allow us play to our core strengths in Retail and SME banking.
“As we make this transition, we will continue to review our positioning within the Ugandan banking sector in line with our objective of maximising shareholder value.
“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.”
Given the foregoing, he said the bank has carried out a thorough review of its existing customer base and put adequate measures in place to continue 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 added.
