DFCU Bank weathers a season of negative publicity

July 24, 2018 in Business, Companies, Markets by Editor

JULY 24, 2018 – Listed lender dfcu Bank has emerged largely unscathed from months of a malicious online campaign that for a short period triggered what sources are describing as a mild ‘flight to quality’ as jittery savers hedged their positions by moving some of their money to the dfcu’s peers in the market.

Dfcu’s stock remained stable on the USE while sources at the Bank of Uganda say they did not see any signs of distress and the lender had not approached them for any support to its capital position.

Sources however say the lender initially experienced some unusual movements as some of its customers transferred money to accounts they held elsewhere in the financial system. The panic was triggered by persistent reports in online publications that the dfcu was in a state of internal turmoil with a key shareholder exiting their position and senior staff throwing in the towel. 256BN, has not been able to establish how much money was moved, but industry sources say it was insignificant.

Longtime stockholder CDC Group announced they would be vacating their 9.97 pc position in dfcu feeding a frenzy of stories that suggested that, this had placed the bank in a precarious position. Exiting the position had no significance as it easily be snapped up by the other shareholders but dfcu’s detractors portrayed it as evidence that the bank the banks prospects were dim.

The reports caused so much concern in the industry and were only quelled last week, after Bank of Uganda Governor Prof. Emmanuel Tumusiime Mutebile made it clear that the closure and subsequent transfer of assets of Crane Bank was fully justified and their would be no turning back on the decision.

Former Crane Bank owner and first suspect as a possible source of the malicious publicity, Sudhir Ruparelia, earlier this month dissociated himself from the reports. Individually, Sudhir is one of the largest holders of dfcu stock.