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In what appears to be a cost-cutting strategy, Standard Chartered Bank plans to close its branches in Gulu and Mbarara, one of Uganda’s biggest towns.

The bank closed its Mbale branch some time back in a move many analysts said signaled bad business despite the town being one of the busiest in the country.

A source within the bank, told this website that the bank wasn’t closing shop in the Ugandan market but rather closing upcountry branches and concentrating in the city.

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“It isn’t true that we are closing operations in Uganda but our new Chief Executive Officer has emphasized scaling down and have operations within the city” said a source.

However, another senior source within the banking sector has told EagleOnline that the bank is phasing out in stages as the ultimate goal is to pull out of the Ugandan market.

The launch of the bank in Uganda was not welcomed by the majority of Ugandans as it targeted high-end individuals and companies. Its services were so expensive for the majority to afford, hence sending them away to cheaper banks.

The latest development in the bank’s business comes at the time when banks are facing slow business growth, affected by among others non-performing loans and generally a slowed economy.

However, some banks claim that the uptake of technology is making expansion of branches irrelevant. Crane Bank was closed by Bank of Uganda on flimsy reasons because DFCU bank that acquired it made abnormal profits within the past six month.

 The bank was founded in 1912, the bank is Uganda’s the oldest commercial bank in the country and has maintained a continuous banking presence in the country since its establishment.

In 1998, Standard chartered Bank Uganda acquired four branches of the former Uganda Cooperative Bank and as of November 2013, the bank had 13 branches and 32 automated teller machines and with a work force of 600 people.

As of December 2015, it was the second largest commercial bank in Uganda by assets, with an estimated asset base of Shs2.68 trillion, behind Stanbic Bank. As of December 2012, shareholders’ equity stood at Shs372 billion and as of June 2013, Standard Chartered Bank Uganda owned an estimated 16.2 per cent of total bank assets in the country.

The bank is a wholly owned subsidiary of the Standard Chartered Bank Group, an international financial services conglomerate, headquartered in London.