Global Trust Bank, owned by the Industrial and General Insurance (IGI) Plc of Nigeria and the National Insurance Corporation of Uganda (NIC) is contemplating opening branches in Rwanda, Burundi and Southern Sudan but says that expansion throughout Uganda’s rural areas is not part of its plan. Global Trust Bank has been described as a “new indigenous Ugandan commercial bank” in East African Business week, after it acquired Uganda’s Commercial Microfinance Limited (CMF) in July 2008. IGI of Nigeria made the purchase of CMF in order to start up Global Trust Bank, which began operations in November 2008. MicroCapital covered the initial acquisition and additional information can be found here. Global Trust Bank has inherited CMF’s eight branches and six agencies throughout Uganda and recently named Richard Byarugaba as its CEO.
Byarugaba was formerly managing director of Nile Bank, and once it was acquired by Barclays Bank Plc. he served as Chief Operations Officer for them. In 2007 he was named as one of Uganda’s richest people. He has been quoted and interviewed by East African Business Week three times in the few weeks about his plans for Global Trust Bank. He states that he intends on operating throughout East Africa, specifically Burundi, Rwanda and Southern Sudan, but that this will not happen immediately. While Byarugaba has stated that Global Trust Bank will help small and medium enterprises (SMEs), he has also commented that an expansion of branches cause higher interest rates on lending and so that is not part of his plan. He intends to reach clients in less accessible areas through undefined delivery channels. While Global Trust Bank will take over CMF’s branches and agencies, it has not been reported whether it will continue offering CMF’s microfinance loan products and its interest rates once the transition is complete. When asked about the world financial crisis and its impact on investments such as Global Trust Bank, he responded by saying Uganda is somewhat insulated from world financial practices, and that what has happened in the USA and Europe cannot happen in Uganda.
In an article in UG Pulse, it was reported that Global Trust Bank is investigating the use of Sharia banking, which declares that money should be lent on trust and without interest. Byarugaba is reported as saying that Global Trust Bank is effectively using sharia banking in Nigeria and will carry out a survey to determine whether Ugandans are suited to sharia banking.
The Global Trust Bank website remains under construction and no financial information is available. The Global Trust Bank does not report to the MIX market.
By Lori Curtis, Research Assistant
Additional Resources:
East African Business Week: “Global Trust Bank to grow local businesses” “Global Trust Bank to expand into Rwanda and Burundi” “Global Trust Bank won’t board expansion bandwagon – Bank MD“
MicroCapital Story: “Nigerian Global Trust Bank Acquires Ugandan Microfinance Institution CML (Commercial Micro Finance Limited)“
MicroCapital Story: “Commercial Microfinance Ltd. Creates Microfinance Savings Account for Ugandan Youths“
The New Vision: “Banks now target the real economy movers“
TMCnet: “Who Are the Richest People in Uganda?“
Uganda Pulse: “Uganda Business News: Global Trust Bank to introduce Sharia banking“
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