Only 3 out of 25 banks in Uganda are locally owned compared to Kenya where 31 out of the 44 banks are locally owned
Banking is not only one of the most profitable businesses in the world, but also vital to the growth and stability of any economy. And venturing into this lucrative sector is quite tempting, but requires a high level of financial discipline. This perhaps explains why Ugandans tried to start several commercial banks only to be declared insolvent, and taken over by Bank of Uganda (BoU) before they were eventually either sold to the foreign banks or liquidated in what came to be popularly known as the banking crisis of the late 1990`s and early 2000`s.
These included Co-operative Bank whose assets were sold to Standard Bank, Greenland Bank (liquidated), International Credit Bank (closed), Teefe Bank (closed) and Gold Trust Bank (closed). Uganda Commercial Bank, which was the biggest local bank, was sold to Standard Bank of South Africa. The topsy-turvy in the banking sector forced government to freeze the licensing of commercial banks in 2004 until the sector was cleaned up in 2007.
The end of the suspension in 2007 saw a mad dash for the industry by foreign banks. Several commercial banks acquired licences, including Kenya Commercial Bank (KCB), Equity Bank, Fina Bank and Imperial, all from Kenya. Others that acquired licensed include Global Trust Bank, United Bank for Africa and Ecobank, all from western Africa. Towards the end of April 2009, the fifth largest bank in Nigeria, Bank PHB, bought 80% ownership of Orient Bank.
NIC Bank from Kenya and Bank of India Uganda are the newest entrants into the market. Unfortunately, in 2012, another indigenous bank; National Bank of Commerce (NBC) was closed by Bank of Uganda due to mismanagement. Its deposits and selected assets were “sold and assumed
