By Spy Uganda
KAMPALA-Nearly a decade after controversially acquiring selected assets and liabilities of the now-defunct Crane Bank, dfcu Limited says the transaction continues to exact a heavy financial toll, with the lender warning shareholders that it expects to post a loss for the first half of 2026.
In a profit warning notice issued under Rule 38(3)(c) of the Uganda Securities Exchange Listing Rules, 2025, dfcu said it “wishes to inform its shareholders and the investing public that the Company’s unaudited financial results for the six months ended 30th June 2026 indicate a loss position compared to the corresponding period in 2025.”
The bank attributes the expected loss to escalating legal expenses arising from the multi-billion-shilling lawsuit before the English High Court in London.
According to the notice, “This is attributed to high legal costs incurred during the period in connection with ongoing proceedings before the English High Court. The proceedings arise from a claim filed in 2020 by Crane Bank Limited (CBL), and some of its shareholders including money magnet Dr Sudhir Ruparelia in London against dfcu Limited, dfcu Bank and other parties in relation to the acquisition of certain assets and the assumption of certain liabilities of CBL.”
Despite the anticipated loss, dfcu sought to reassure investors that the litigation has not fundamentally weakened its banking operations, stating that “The Group remains resilient with its key fundamentals strong and on a sustained upward trajectory as indicated in the published financial results.”
A Deal That Refuses To Go Away
The case traces its roots to October 2016 when the Bank of Uganda took over Crane Bank under statutory management before closing it and, in January 2017, transferring selected assets and liabilities to dfcu.
The acquisition immediately generated controversy, with Crane Bank founder Dr. Sudhir Ruparelia and other former shareholders maintaining that the takeover and subsequent sale were unlawful and that the bank’s assets were transferred at a gross undervalue.
Those claims are now being heard before the English High Court, where Crane Bank Limited and its former shareholders sued dfcu Limited, dfcu Bank and other defendants in 2020.
Court Rejects Key Parts Of dfcu’s Defence
The latest profit warning comes shortly after the English High Court dealt dfcu a procedural setback.
Deputy High Court Judge Paul Stanley KC refused to allow key amendments to the bank’s defence, ruling that dfcu cannot simply rely on conclusions contained in forensic reports prepared by PricewaterhouseCoopers (PwC) as though they were established facts.
The judge held that while the reports may be referred to in explaining the context in which regulators made decisions, their contents must still be proved through evidence at trial if dfcu intends to rely on them.
He also warned that adopting extensive sections of the reports into the pleadings would create what he described as a “dangerous ambiguity” between allegations and proven facts, while unnecessarily expanding the issues for trial.
Litigation Costs Continue To Mount
The latest disclosure is the clearest indication yet that the prolonged litigation is beginning to weigh directly on dfcu’s financial performance.
Although the bank insists its underlying business remains sound, investors will be closely watching whether the legal battle, which has already stretched for years, continues to erode profitability in subsequent reporting periods.
