Tripoli, 30 April:
The Libyan-owned Tropical Bank suffered heavy losses while under the control of the Ugandan Central Bank, following UN . . .[restrict]sanctions against the Qaddafi regime, when almost half of customers closed their accounts.
In the year to December 2011, the bank lost almost $250,000 against a profit of $2.25 million the year before. Tropical’s managing director Osama Rami Serrag today told Libya Herald that the losses stemmed from uncertainty among local account holders during the revolution. Almost 49 percent of accounts had been lost.
“Some of our customers were afraid that the bank might fail, so they removed their money and closed their accounts,” said Serrag. He had been running Tropical’s nine-branch network since 2010. However, when the Ugandan Central Bank took over Tropical in line with UN sanctions on 25 March, 2011, he and his colleagues stepped down and he himself remained in the Ugandan capital, Kampala.
The bank was returned to Libyan ownership on 6 March this year. Beside the flight of account holders, the bank also lost money because under Ugandan care, staff numbers increased from 160 to 190 and salaries were boosted 50 percent, said Serrag.
“We are now working to get the figure back down to 160,” he explained. “Most of the accounts we lost were retail. I am glad to say that we already have about 70 percent of them back now and we are expecting to grow retail accounts strongly in the coming year.”
Tropical also suffered because under UN sanctions, Libya’s African telecoms investor, LAP GreenN, one of its major corporate customers, was also taken under Ugandan control.
LAP GreenN owns 69 percent on Uganda Telecom and has committed to provide the business, in which the Kampala government holds the remaining share, with fresh capital. UTL operations suffered a funding squeeze during the revolution, leading to disputes with the second largest national carrier MTN Uganda and an $8 million demand over inter-connection fees. Another Ugandan telco, Airtel sued LAP GreenN over a $4 million debt but the case was settled out of court.