JULIUS KAKEETO: Investing in new technologies, revamping our digital banking platforms, revamping our branch network all paid off with good results PostBank Uganda Limited has released its 2021 financials, registering double-digit growth across all its major business parameters. Customer deposits grew by 13% from UGX449 billion in 2020 to UGX507.2 billion while lending grew by 35.9% from UGX334.7 billion to UGX454.9 billion- a growth of UGX120.2 billion! Increased lending pushed a 20.9% growth in total income- from UGX119.5 billion to UGX144.5 billion, hence a healthy 21.5% growth in net profit- from UGX10.1 billion to UGX12.2 billion. Shareholder Funds also grew by 15.5% from UGX101.4 billion to UGX117.1 billion. In this interview, Julius Kakeeto, Chief Executive Officer/ Managing Director speaks about the Bank’s performance and the future as a fully-fledged tier-one commercial bank.

PostBank is now a fully-fledged commercial bank, and the year has not been easy for the sector. What are the highlights for the year 2021?

2021 was a tough year owing to the COVID-19 pandemic. Many customers were still suffering from the effects of the 2020 lockdown and then they had to deal with another lockdown in 2021. At PostBank, we focused on supporting the adversely affected businesses to survive and recover through restructuring of facilities and providing working capital support.

Despite the headwinds, the Bank registered growth across all the key parameters; a 22% increase in Profit After Tax (PAT) to UGX. 12.2 bn in 2021, 13% growth of customer deposits and 36% growth of the loan portfolio.

The Bank continued with its strategy of revamping and widening its distribution channels to enable access to its products and services while improving customer experience.

It is another record profit by the Bank. What are you doing differently to sustain this trend in a highly competitive sector?

Firstly, our recent acquisition of the Tier One operating license offers the Bank a lot of opportunities to fully optimize its potential. We are in a stronger position to mobilise deposits which are the heartbeat of a bank. Our customers are also set to enjoy a new and wider variety of products and services that come with being a fully-fledged commercial bank.

The Bank will ensure that it continues to improve the customer experience for its target market – the masses, MSMEs and agro-businesses on a wider scale. We also intend to scale up our existing partnerships with both Government and Development Partners to extend financial services to Ugandans, especially the underserved.

We noted a relative uptick in your operating expenses, impairment and NPLs. What drove these increases and how are you keeping them under control?

In 2021, we heavily committed to investing in new technologies, revamping our digital banking platforms, revamping our branch network in addition to opening new outlets. All this was aimed at improving customer experience and enhancing the effectiveness of our operations.

For the digital journey, we upgraded our PostApp and PostMobile  *263# to ease transactions, especially during the lockdown period. We also replaced half of our fleet of ATM dispensers with recycler/intelligent ATMs that support instant cash deposits, cashless transactions, and a wide range of other services. We are planning on replacing the rest of the ATM fleet during the course of this year, 2022.

Last year, we also embarked on upgrading our core banking system which has been successfully completed.

To take services to the people, we opened new branches in 2021 starting with Mukono, Kamdini, Rushere, Butogota and Kyazanga. We also opened a Corporate Branch at Forest Mall, Kampala to cater for the high net worth and corporate customers.

NPLs increased as the Bank had to account for the deteriorations in the credit portfolio quality that was a result of the impact of COVID-19. The micro-lending business was adversely affected by the inability of groups to meet during the lockdowns while the Small and Medium Enterprises were struggling with subdued business sales. We are optimistic that several customers will recover following the various credit relief measures that the bank offered in line with the BoU directives.

We noted that a lot of your earnings for the period came largely from actual lending out money compared to investing in securities. What impact have you had on the ground as a result?

PostBank prides itself in offering affordable and sustainable financial services to the masses. Last year’s earnings underpin our commitment to supporting Micro Small and Medium Sized Enterprises (MSMEs) with agriculture being one of our core areas. Considering most of these MSMEs are involved in the agriculture value chain – production, trade, processing, distribution, storage, and logistics, PostBank will remain an MSME bank.

We shall continue to innovate tailor-made products that support the entire value chain and deepen our coverage and outreach using our robust financial literacy programs.

The credit relief measures put in place by the Central Bank expired in September. How are you managing some of the risky loans in your portfolio?

We are the people’s bank, providing opportunities for financial growth to Ugandans countrywide. Through our competent staff, we are in constant engagement with borrowers to support them to pay back their debts.

We also set in motion the Small Business Recovery Loan which is complemented by the Uganda Development Bank-PBU partnership low-rate loan for value addition to further support financially distressed businesses and individuals. The goal is to avail capital that borrowers can be able to pay back under flexible repayment terms.

Looking forward, what can customers expect from the bank in the next 12 months?

This year, we shall continue to provide affordable and sustainable banking services that drive the social and economic transformation of our customers. We also plan on continuing with our digital journey that will further improve the customer experience at all touchpoints of interaction

with the Bank.