New leadership for bankers’ umbrella as total assets top $12 billion

May 29, 2024 in Finance, Financial Services by Editor

Sarah Arapta highlighted fraud, tax administration and dispute management issues as some of the key challenges the industry was facing and called upon the new leadership to continue with engagements on these fronts.

Total assets of Uganda’s banking industry have increased by 8% from UGX45.8 trillion (about $12 billion) in 2022 to UGX49.5 trillion in 2023 while customer deposits increased from UGX 31.5 trillion to UGX33.96 trillion (almost $9 billion) during the same period representing a growth of 7.8%.

Speaking during the Uganda Bankers’ Association (UBA) AGM recently, outgoing Chair, Sarah Arapta highlighted fraud, tax administration and dispute management issues as some of the key challenges the industry was facing and called upon the new leadership to continue with engagements on these fronts. The AGM elected Julius Kakeeto, the Chief Executive Officer of Post Bank Uganda and previously Arapta’s Vice, as the new Chairperson for a two-year period.

Arapta is the CEO and Managing Director of Citibank Uganda and was the first woman to lead UBA since its inception in 1981 with current membership at 35 banks including the Uganda Development Bank and the East African Development Bank.

She said the best gift the industry had given its customers towards the end of 2023, was to drop the practice of early loan repayment fees charged on outstanding loans, which was agreed to by the entire UBA membership. This decision to halt the early repayment fees was aimed at facilitating the loan market with flexible options and alternatives in constraining economic circumstances and by extension the growth of private sector credit.

However, she asked the new leadership and members of UBA in general, to continue to nurture the industry gender initiatives of the UBA Women Economic Empowerment Programme, focusing on both female staff and entrepreneurs.

Other elected members on the UBA Executive Committee are Michael Mugabi, CEO, Housing Finance Bank as Vice Chair; Edgar Byamah, CEO KCB Bank, as Treasurer;  Mumba Kalifungwa, CEO, Absa Bank as Auditor. Committee members are Sanjay Rughani, CEO, Standard Chartered Bank; Patricia Ojangole, CEO Uganda Development Bank and Shafi Nambobi, CEO, UGAFODE. UBA Executive Director, Wilbrod Owor serves as secretary to the Committee.

According to the latest UBA report, industry access channels, especially agent banking points across the country increased to 33,437 bank agents by close of 2023 in addition to 984 ATMs and 856 branches.

The industry’s gross loans increased by 7.6 % from UGX19.6 trillion in 2022 to UGX21.1 trillion in 2023 with the top five sectors credit portfolio by member financial institutions making up 89.1% of the total industry loan book.

These sectors are household and personal loans (UGX4.85 trillion), real estate (UGX4.31 trillion), trade (UGX3.72 trillion), manufacturing (UGX2.89 trillion) and agriculture (UGX2.53 trillion).

In terms of 2023 spend, Arapta said the industry’s direct taxes to URA totaled UGX1.29 trillion up from UGX1.08 trillion in 2022 and expenditure on ICT increased to UGX694 billion in 2023 up from UGX392 billion the previous year. Total National Social Security Fund employee payments increased to UGX 157.3 billion from UGX131 billion in 2022 with a total staff number of 19,428 (53% female and 47% male).

UBA’s current strategic plan (2022-2024) under the theme: Building an inclusive and resilient banking and financial services sector through collaborations and partnerships , is being implemented around four strategic priorities: stepping up stakeholder engagement involvement in key national development programmes; expanding the role and contribution of Banking in Uganda through building a resilient banking sector; banking sector and economic recovery sustainability and support post COVID-19 pandemic recovery and implementing identified key strategic projects