Inside the collapse of Finance Trust Bank

When the Bank of Uganda (BoU) quietly approved Finance Trust Bank (FTB)’s transition from a Tier I commercial bank to a Tier II credit institution effective April 1, 2026, and went on to announce the decision publicly in a notice issued Thursday, Jan. 29, it merely confirmed what insiders had long whispered: the collapse was inevitable.

The only question had been when—and who would take the blame—and not if.

On paper, the downgrade has been framed by FTB as a “strategic board decision.” In reality, it marked the end of a prolonged survival struggle triggered by regulatory tightening, capital inadequacy, failed rescue talks, and a high-profile deal with Nigeria’s Access Bank that never materialized.
Trouble began in 2022, when amendments to the Financial Institutions Act raised the minimum paid-up capital for commercial banks from UGX 120 billion to UGX 150 billion. Bank of Uganda argued the move was necessary to strengthen sector resilience and prevent future bank failures.

For large, well capitalised banks, this was a speed bump.
For mid-sized and smaller lenders like Finance Trust Bank (FTB), it was an existential threat.

Behind the scenes, FTB’s books simply could not stretch to UGX 150 billion without external capital. According to banking industry sources, the gap was neither cosmetic nor short-term—it was structural.
BoU, anticipating casualties, openly advised weaker institutions to merge, downgrade, or sell.

Several banks took the hint—Pride Microfinance Bank, BRAC Uganda Bank Ltd, Yako Bank, Opportunity Bank, ABC Capital Bank, and Guaranty Trust Bank (GTBank) Uganda.

The latter three downgraded from commercial bank status within the past two years. Hoping against hope, FTB did not—at least not immediately.

As the deadline approached, FTB went into capital panic mode.

The bank aggressively pursued development partnerships and collaborations with entities such as aBi Trust, the East African Development Bank, and the Grow Project. These collaborations did improve profitability and liquidity flows, but insiders admit they were insufficient to convince regulators that the capital problem had been solved.

At best, they bought time. At worst, they created the illusion of stability.

By late 2023, it became clear that only a major equity injection could save FTB’s commercial banking licence.

Desperation opened the door to Nigeria’s Access Bank Group, one of Africa’s largest banking conglomerates.

In 2024, Access Bank proposed to acquire 80.89% of Finance Trust Bank a deal that was immediately celebrated internally and publicly. For FTB, it was salvation. For BoU, it was a reason to delay enforcement. For customers and staff, it was reassurance that the bank would survive.

In a glowing press release issued by Lubega Paul Percy, then Head of Marketing and Corporate Affairs, FTB announced the signing of a definitive agreement, pending approvals from the Central Bank of Nigeria and Bank of Uganda.

Top executives from both banks spoke of financial inclusion, women empowerment, technology integration, regional trade opportunities and long-term strategic alignment.

FTB’s Managing Director Annet Nakawunde Mulindwa called it a “transformative partnership.”

Access Bank’s MD Roosevelt Ogbonna hailed it as a “milestone in East African expansion.”

BoU, acting in good faith, allowed FTB to operate past the deadline, betting that Access Bank would close the deal in early 2025.

Instead, behind the scenes, Access Bank was quietly pursuing other opportunities in the region. By May 30, 2025, the truth became undeniable when Access Bank completed the acquisition of National Bank of Kenya (NBK) from KCB Group PLC—a transaction that had started around the same time as the FTB talks in 2024.

Unlike the Ugandan deal, the Kenyan acquisition received approvals, closed fully, transferred ownership and strengthened Access Bank’s East African footprint.

To industry watchers, the message was brutal, FTB had been sidelined or ‘lied’ to by Nigerian Access Bank executives.

Whether Access Bank deliberately strung FTB along or simply prioritised a bigger, cleaner acquisition remains a matter of interpretation. What is not disputed is that FTB waited—and waited too long.

By the time it became clear that Access Bank would not rescue them, BoU’s patience had run out.

With no new capital, no buyer, and no political room left, FTB had only one option: downgrade.

In Thursday’s Jan. 29 notice, Bank of Uganda confirmed that Finance Trust Bank would transition to a Tier II credit institution, with a three-month transition period starting January 1, 2026.

As a Tier II institution, FTB can accept time and call deposits, can extend credit, cannot operate cheque accounts and cannot trade in foreign exchange.

Its new minimum capital requirement is UGX 25 billion, far below the commercial bank threshold—but also a symbolic admission that the Tier I dream is over at-least for now.

Founded in 1984 as Uganda Women’s Finance Trust, FTB was built on a noble mission— serving women and low-income populations. It later became Uganda Finance Trust Limited, a Tier III microfinance institution, before finally securing a commercial banking licence in 2013.

But according to industry analysts RedPepper talked to, the transformation was cosmetic rather than strategic.

Despite branding itself as a women’s bank, it reportedly developed no distinct women-focused products, failed to define a clear niche, competed head-on with bigger banks without scale and relied heavily on donor-linked programmes.

By May 2024, it operated 35 branches, but scale alone could not mask deeper governance and strategy gaps.

As one banking industry watcher put it bluntly, “The fall of Finance Trust Bank was a matter of when, not if. Finance Trust Bank did not collapse overnight. It bled slowly—through capital pressure, strategic hesitation, regulatory grace periods, and a high-profile deal that never came through.”

He added: “Whether Access Bank duped FTB or merely outplayed it strategically is open to debate. What is clear is that FTB bet everything on a foreign rescuer—and lost. Now downgraded, constrained, and exposed, the bank enters its next chapter smaller, weaker, and stripped of commercial status.”