KAMPALA — Nearly a decade after acquiring selected assets and liabilities of Crane Bank, dfcu Bank is still facing the financial consequences of the transaction, with a prolonged legal dispute emerging as one of the biggest pressures on the lender’s earnings.
The bank has attributed its projected Sh15.8 billion net loss for the first half of 2026 partly to rising legal expenses linked to the ongoing Crane Bank dispute before the Commercial Court in London.
The loss marks a sharp reversal from the Sh34.5 billion profit recorded during the same period last year. Before tax, dfcu expects to post a loss of Sh26.3 billion, compared with a Sh39.7 billion pre-tax profit in the first half of 2025.
The latest results highlight how a transaction intended to strengthen Uganda’s banking sector has evolved into a costly legal and financial challenge for one of the country’s leading commercial lenders.
Despite the earnings decline, dfcu’s underlying banking operations continued to expand during the period.
The lender’s customer deposits increased by Sh410 billion to Sh2.87 trillion, up from Sh2.46 trillion a year earlier.
Its loan portfolio also grew, with gross loans and advances reaching Sh1.44 trillion, while total assets expanded to Sh3.94 trillion.
Operating income increased by eight per cent to Sh215.6 billion, indicating that the bank’s core business remained resilient despite the pressure on profitability.
However, increased expenditure outweighed the gains.
Operating expenses rose by 53 per cent to Sh230 billion, with dfcu citing significant legal costs associated with defending the Crane Bank case as one of the major contributors to the increase.
The rising expenses have complicated the bank’s efforts to translate business growth into stronger profits.
The dispute traces back to 2016 when the Bank of Uganda placed Crane Bank under statutory management following concerns over its financial condition.
In January 2017, dfcu acquired selected assets and liabilities of Crane Bank in a transaction that was expected to support stability in Uganda’s banking sector.
However, the deal later became the subject of a legal challenge by former Crane Bank shareholders, led by businessman Sudhir Ruparelia.
Mr Ruparelia has disputed the circumstances surrounding the takeover, arguing that Crane Bank was financially viable and that the transfer of its assets was conducted at an undervalued price.
The claims have been contested by dfcu, which maintains that the acquisition was conducted legally and followed the regulatory process established under Uganda’s banking laws.
The bank has argued that the intervention followed assessments indicating that Crane Bank had become significantly undercapitalised and required regulatory action.
The prolonged court battle has come with significant financial implications for dfcu.
According to the bank’s 2025 annual report, dfcu spent Sh76.6 billion on legal expenses related to the Crane Bank dispute, up from Sh42.3 billion the previous year.
The continued legal expenditure has placed additional pressure on the bank’s cost base at a time when financial institutions are already dealing with rising operational expenses and increased investment in technology and service delivery.
With the London proceedings expected to enter another phase, the financial impact of the dispute remains a key concern for investors and stakeholders.
The Crane Bank dispute remains one of Uganda’s most closely watched corporate and banking cases.
The former shareholders are seeking damages running into hundreds of millions of pounds, while dfcu continues to defend the legality of the transaction and its conduct following the acquisition.
The outcome of the proceedings could have significant financial implications for both parties and may influence future discussions around bank resolutions and regulatory interventions.
For dfcu, however, the impact of the dispute is already reflected in its financial statements.
While the lender continues to record growth in deposits, lending and assets, management faces the challenge of containing costs, protecting profitability and maintaining confidence as the legal battle continues.
Nearly ten years after Crane Bank exited the market, the dispute remains a reminder of the long-term financial consequences that can arise from major corporate transactions.
For dfcu, turning balance-sheet growth into sustainable profits will depend not only on business expansion but also on how it navigates the costly legal chapter that began with the Crane Bank acquisition.