Uganda’s largest bank by assets and deposits, Stanbic Bank, has posted an incredible 26.5 percent growth in assets from UGX 6.1trillion to UGX 7.7 trillion, Half Year results for year 2020 show.
In their first half year, Stanbic’s lending grew by 24.0% to UGX 3.4 trillion from UGX 2.7 trillion in June 2019 while maintaining the Compound annual growth rate (CAGR) of 16.4% which hasn’t changed for the last 5 years.
The bank also saw its customer deposits increase by UGX1.1 trillion (26.6% year on year growth) from UGX 4.1 trillion in June 2019 to UGX 5.2 trillion in June 2020 at a CAGR of 16.5 percent during the same period. This growth according to the bank was enabled by a strong client ecosystem.
However, Profit after tax reduced by UGX 6.6 billion from UGX 134 billion as at June 2019 to UGX 127.4 billion as at June 2020. This is primarily attributed to the negative impact of Covid-19 on client business which led to significant increase in the credit impairment charge, and drop in transaction volumes which impacted NIR. The CAGR over the last 5 years is 4.5%.
Meanwhile, the bank reported a Shareholders’ equity increase by UGX 247 billion (24.8%) compared to the same period last year at a CAGR of 18.7%.
Commenting on the financial results for the Half Year, Ms Anne Juuko, the Chief Executive Officer, Stanbic Bank said; Despite the difficult operating environment, Stanbic’s performance in this first half has shown the banks resilience and commitment to implementing a robust strategy in the current economic conditions’’
Resilience in hard times
Commenting on the key achievements for Stanbic Uganda Holdings Ltd for the First Half results, Patrick Mweheire, Regional CEO, Standard Bank Group, says Stanbic Uganda has demonstrated resilience despite the challenges in the first half months presented by the COVID-19 pandemic.
‘’Among the key achievements, SUHL successfully established two new subsidiaries: Stanbic Properties Uganda Limited, that will hold and manage the real estate portfolio and Stanbic Business Incubator Limited, that will manage enterprise development on behalf of the holding company and its subsidiaries. That brings the total of subsidiaries under the holding company to three, in addition to the Bank which was its first subsidiary’’- Patrick Mweheire noted
Mweheire added; ‘’Looking ahead, we expect to have two other subsidiaries as the first phase of additions which will include a stock brokerage subsidiary that will increase the suite of financial services offered to Stanbic clients and a financial technology subsidiary which is expected to advance Stanbic digital agenda’’
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In the last first half months which have been negatively affected by the Cocid-19 pandemic that saw several businesses closed while many lost their jobs, Stanbic bank says it has been able to lend a hand to its clients demonstrated bythe bank’s lowering of its Prime Lending Rate twice during the period to 16% which is one of the lowest PLRs of all active retail financial institutions in Uganda. ‘’Our aim is to ensure our customers can benefit from more affordable lending rates’’.
The bank also extended Credit Relief Programmes to over 1,600 clients. With a portfolio of over 40,000 SME clients, the bank encouraged all SME customers whose incomes have been impacted as a result of COVID19 to apply for a loan repayment holiday based on their circumstances. Over 60% of the loans restructured in the Stanbic’s portfolio have been SMEs.
‘’We offered credit relief programmes to business and personal customers tailored to suit their circumstances. Our aim was to ensure that we see that their businesses are sustained and the impact on the economy is minimised.’’ – says Anne Juuko, CEO Stanbic Bank Uganda
‘’The most impact sector has been the SME’s and Stanbic has been deliberate in its efforts to provide the necessary relief support to help sustain their businesses.
On the key focus for the bank in the next half of the year, Juuko says; ‘’the pandemic has presented an opportunity for us to reshape the way we deliver services to our clients. As we start see some economic recovery following the Government’s recent measures to relax restrictions, Stanbic will focus its efforts on implementing initiatives to support the recovery of key sectors that were heavily impacted by the pandemic, especially the SME sector.
“We shall continue to accelerate our digitization agenda to ensure we continue to provide more innovative and efficient banking services to our clients. And lastly, our customers remain our core focus and our ability to reshape our strategy and continue to innovate solutions that meet their needs will be our priority.
“We are committed to our purpose, to drive Uganda’s growth and continue to take the necessary actions to support our clients and contribute to the growth of Uganda’s economy,” Juuko concludes.
Key figures:
- Assets grow from UGX 6.1trillion to UGX 7.7 trillion
- Lending grows to UGX 3.4 trillion from UGX 2.7 trillion
- Customer deposits grow from UGX 4.1 trillion in June 2019 to UGX 5.2 trillion in June 2020
- Shareholders’ equity increase by UGX 247 billion (24.8%)
