The Bank of Uganda has approved Finance Trust Bank’s request to downgrade its operations from a Tier I commercial bank to a Tier II credit institution.
The downgrade comes even after the lender reported a 178% increase in profit after tax to approximately UGX.10.3 billion ($2.78 million) for the 2024 financial year, recovering from a previous dip. The bank’s total assets grew to about UGX551 billion ($148.8 million)
In a public notice released on Thursday, BoU confirmed that Finance Trust Bank Limited has been authorised to operate under a Credit Institution License effective April 1, 2026. It means the lender would shift business model to match tier II operations.
“Bank of Uganda hereby informs the general public that Finance Trust Bank Limited has been authorised to transition from a Tier I Commercial License to a Tier II Credit Institution License effective 01 April 2026,” the regulator said in part.
FTB has a shareholders’ equity (book value) of approximately $21.3 million as of December 31, 2024. Its total assets for the bank in 2024 stood at roughly $154.3 million, with a 15% growth in equity.
The board approved the transition following an application for the new license to better position the institution to serve its core customer segments.
Also Read: Bank of Uganda Cuts Interest Rate for First Time in a Year
It has been placed on a three-month transition period, running from January 1 to March 31, 2026, during which it will phase out products and processes that require a Tier I commercial banking license. The move is aimed at ensuring a smooth service transition for customers while safeguarding stability within Uganda’s financial sector.
In Uganda, institutions that take public deposits, offer current (checking) accounts, conduct foreign exchange transactions, and provide full banking and treasury services must hold a Tier I commercial banking license, which requires a minimum capital of UGX 150 billion ($40 million) as of June 2024.
This license covers core banking functions such as deposit taking, payment services, lending, treasury management, and certain investment-related services.
Institutions unable to meet this capital threshold may be downgraded to Tier II (credit institutions), which restricts them from offering checking accounts and engaging in foreign exchange trading.
The change comes amid ongoing regulatory reforms introduced in 2022, when the Ugandan government raised minimum capital requirements for commercial banks, effectively increasing the threshold for Tier I lenders.
Finance Trust Bank has operated as a commercial bank since November 1, 2013, when it received a Tier I license after taking over the business of Uganda Finance Trust, formerly a micro-deposit taking institution.
