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Stanbic Bank Uganda has maintained a strong growth momentum in the first half of 2024 posting a profit of UGX 236 billion on its income statement.
This represents a 17.6 percent growth compared to the UGX 200 billion earned in the first half of 2023.
Stanbic’s stellar half-year performance was largely backed by the Group’s revenue which remained well diversified with non-interest revenue in fees, commissions and trading revenue contributing 43.2% to the total pool of revenue. This was further supported by drop in credit impairments driven by improved asset book and recoveries after write off.
The bank also recorded growth in customer loans at UGX 4.4 trillion, a growth of 9.5 percent from UGX 3.9 trillion in the first half of 2023. In a similar fashion, customer deposits grew to UGX 6.6 trillion, a 4.9 percent increase from UGX 6.2 trillion earned within the same period last year. This represents over 19% market share.
The Bank has deliberately focused on supporting the growth of the SME segment of the economy, given that they generate 70% of manufacturing output and create 90% of new jobs in the economy.
Interms of inclusive lending, the bank paternered with a number of SACCOS to extend financial services to the unbanked disbursing over UGX 127 billion to over 300,000 SACCO members with a ripple financial impact on over 1.5 million Ugandans.
The Bank also observed an upward trajectory in its asset portfolio to UGX 9.7 trillion, a 3.8% growth from the previous year of UGX 9.4 trillion, which positions the bank in a much stronger position to support major development projects and further facilitate economic growth.
Stanbic also made a contribution of UGX 181 billion in taxes to the government, but it has also been the biggest collector of government revenue to URA at UGX 4.9 trillion in the first half of the year.
Francis Karuhanga, Chief Executive, Stanbic Uganda Holdings Limited (SUHL) said, the strong results on both the income statement and balance sheet were underpinned by a diversified business model with a strong focus on providing innovative solutions to clients, and effective risk management.
“The Bank subsidiary continues to be the anchor to our performance, as our beyond-bank subsidiaries gain momentum on their growth trajectory and augment our efforts to deliver on our purpose,” Mr Karuhanga said.
Karuhanga also noted that the bank navigated a dynamic operating environment in the first half of the year, which was characterised by an uptick in inflation to 3.9% in June 2024 from 2.6% in December 2023, despite below the Central Bank’s forecast of 5%.
“We also saw the Central Bank Rate rise to 10.25% at end June 2024 from 9.5% in December 2023, resulting in a slight upward trend in lending rates. Private sector credit growth remained below 10% and stood at 6.6%, a signal that we are yet to return to pre-Covid levels of growth,” Karuhanga noted.
Karuhanga also expressed optimism about the economy and the Central Bank Rate. .
“Our priority remains ensuring our clients’ needs are appropriately and effectively met. We are optimistic that the economy will continue to grow as individual and commercial borrowers take advantage of lowering interest rates, should the cuts in the CBR continue.”
Central to sustaining the Bank’s growth aspirations, is improving our client experience and one of the cost drivers has largely been a huge investment in technology and the bank’s human capital.
One such low-cost payment solution is Flexipay, with over 900,000 clients and continues to scale In terms of number of transactions and volumes valued at UGX 14 trillion shillings in the first half of the year with over 7 million transactions.
. In addition, the bank’s self-service channels such as internet, and mobile banking, have caused the traffic to branches to significantly reduce, as technological innovations are now enabling Ugandans to bank conveniently anywhere, anytime, with limited risks.
The Board has proposed an interim dividend payment of UGX 140 billion to its shareholders.