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Housing Finance Bank profits reach a record UGX58.5 bn; becomes Uganda’s 5th most profitable bank Under the leadership of David Opiokello as Chairman and Michael Mugabi as Managing Director/CEO, Housing Finance Bank, the government and NSSF-owned bank has grown to new record highs. The bank is now the 5th most profitable bank in Uganda as well as one of only 10 banks (out of 25 banks) with a customer deposits base of UGX1 trillion.

by The CEO Magazine Team
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Housing Finance Bank, the government of Uganda and NSSF-owned lender is now Uganda’s 5th most profitable bank, jumping three positions from the 8th in 2021. 

In 2022 results released last week, the bank reported that net profit grew by a record  42.7% growth from UGX41 billion to UGX58.5 billion.

The bank increased its share of industry profits from 3.2% to 4.5%. In total 23 of 25 banks reported profits in 2022- a combined UGX1.29 trillion, up from 1.08 trillion in 2021.

The top 4 profitable banks are Stanbic (UGX366 billion), Centenary Bank 9UGX249.6 billion), Absa Bank Uganda (UGX141.2 billion) and Bank of Baroda (UGX122.2 billion). 

The bank in 2022 also broke another record, entering the fold of only 10 of 25 banks with a customer deposit base of above UGX1 trillion⏤ deposits grew 36.7% from UGX818 billion to UGX1.12 trillion. The only other banks are Stanbic, Centenary Bank, Equity Bank, Standard Chartered Bank, Absa Bank Uganda, dfcu Bank , DTB Bank, Bank of Baroda and Citibank.

Burgeoning deposits powered a 15.4% growth in lending, from UGX674.3 billion to UGX778 billion⏤ a growth of UGX103.7 billion. Interest revenue from lending being a major component of total revenue, influenced total income to grow by  16.4%, from  UGX191.5 billion to UGX258.1 billion.  This subsequently saw to a 42.7% growth in net profit from UGX41 billion to UGX58.5 billion!  

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Total assets grew 24.2% from UGX1.3 trillion to UGX1.62 trillion- a growth of UGX315.6 billion.

Although he has worked longer with the banker, Michael K. Mugabi has been the bank’s chief executive since November 2018 and has seen the bank through robust growth across key fundamentals.

Overall the bank also improved its industry position from the 10th to the 9th by assets and deposits. While it maintained its position as 9th top lender, it improved market share from 3.4% to 3.9%.

The bank also reported that it was solid with share capital of UGX122 billion above the UGX120 billion limit. Core Capital also increased from UGX238.9 billion to UGX249.5 billion above the UGX120 billion limit.

On 16 November 2022, the Minister of Finance Planning and Economic Development in consultation with the Bank of Uganda endorsed a new statutory instrument requiring commercial banks to have a minimum paid-up cash capital (share capital) of UGX120 billion by 31 December 2022, and UGX150 billion by 30 June 2024. The instrument also stipulated minimum capital funds unimpaired by losses (core capital) of UGX 120 billion by 31 December 2022, and UGX 150 billion by 30 June 2024.  

This is Michael Mugabi’s 4th set of full-year results since he assumed substantive leadership of the bank in November 2018. During the four years, bank deposits have grown 2.8 times or 179.8% from UGX451.3 billion in 2018 to UGX1.12 trillion in 2022- a CAGR of 25.5%. Lending has grown 1.5 times or 52.1% from UGX511.6 billion to UGX778 billion- a CAGR of 11%. Net profit has grown 2.8 times or 179.8% from UGX20.9 billion to UGX58.5 billion. As a result, total assets grew 2.1 times or 108.5% from UGX776.9 billion to UGX1.62 trillion.