Close to $100m profit for Stanbic Bank Uganda during 2022Mashanda (right) said the consistent delivery of solid results reflects SUHL’s unwavering commitment to a meticulous execution of its strategy, whose core pillars include revenue growth, people development and a disciplined approach to cost management while investing for growth.
For the year ending December 2022, Stanbic Bank Uganda Limited (SBUL), the anchor subsidiary of Stanbic Uganda Holdings Limited (SUHL), saw a 33% rise in profit-after-tax to UGX 366 billion ($96 million) from UGX275 billion posted during 2021. This is the highest figure ever recorded by the bank during 32 years of operating in Uganda.
Other subsidiaries of SUHL are Stanbic Properties Limited; Flyhub, SBG Securities and the Stanbic Business Incubator. SUHL is part of Standard Bank Group, the largest African banking group by assets.
Announcing the latest financial results today, Andrew Mashanda, the SUHL Chief Executive said, “Despite the prolonged uncertainty of the global and local economy, we closed the year with a strong performance and delivered a return on equity of 21.6%, well above our target of 20% and an improvement from 19.4% in 2021. Our performance continues to be underpinned by our banking subsidiary which posted strong results across all key performance indicators.”
Giving insights into the bank’s performance, SBUL Chief Executive, Anne Juuko said, “During the pandemic, between 2020 and 2021, we banked on bold initiatives that were aimed at supporting our customers to go through the tough times; it is those initiatives that bore fruit last year. In 2022, we saw more customers partner with us across the retail and business banking segments—a demonstration of their trust in our brand. We registered a 30% increase in the volume of transactions, compared to 2021.”
Compared to 2021, Stanbic Bank customer deposits rose by 6.8% from UGX5.7 trillion to UGX6.1 trillion and customers’ loans were up by nine percent from UGX3.7 trillion to UGX4.1 trillion while the Non Performing Loans (NPL) ratio dropped by 2.9%. There was also an improvement in the bank’s Total Capital Adequacy rising by 23.4% compared to 21.9% seen during 2021. Total assets during 2022 rose to UGX9 trillion from UGX8.7 trillion while liabilities went up slightly to UGX7.3 trillion from UGX7.2 trillion.
Juuko said, “The growth in new customers across segments contributed to the increase in deposits to UGX6.1 trillion at the close of 2022, from UGX 5.7 trillion in the same period the previous year. We supported our customers through the pandemic, and in 2021, we restructured loans to the tune of UGX192.7 billion. In 2022, the value of these restructured loans considerably reduced to UGX 14.5 billion, while bad loans from the same pool docked at UGX26 billion. This indicates that a larger portion of our customers have generally recovered and are proficiently repaying back their loans.”
She said this recovery led to significant growth in demand for new credit in 2022, with loans and advances growing to UGX 4.1 trillion, from UGX 3.7 trillion in 2021. She said lending is Stanbic Bank’s primary business because credit is the lifeblood of the economy, effectively driving Uganda’s growth.
She said, “It’s worth noting that agriculture is still among the top five recipient sectors of Stanbic Bank Uganda’s financing in 2022, accounting for UGX 437 billion, and this is in line with the country’s key drivers of the economy. The other top recipients of our credit last year are; lending to households accounting for UGX 1.04 trillion, trade at UGX 663 billion, real estate at UGX573 billion and transport/ telecommunications at UGX 417 billion. Our growth in 2022 is not in isolation as it reflects Uganda’s post-Covid-19 economic recovery as evidenced by the increase in credit uptake by businesses.”
Going forward, Juuko said the bank will continue to strengthen risk management in recognition that operational risk remains a challenge, particularly in light of the cyber incidents in the financial services industry that have started to occur more frequently.