Stanbic Bank weathers Covid-19 to post profit in first half 2021Mashanda (left) said their priority is investing more in technology and digital solutions while Juuko said the bank’s performance shows success in growing shareholder value while also supporting customers to remain resilient.
Stanbic Uganda Holdings Limited (SUHL), a member of the Standard Bank Group, demonstrated business resilience during the first half of 2021, weathering the effects of the Covid-19 pandemic to post a robust performance. There was strong growth across all key metrics, largely driven by Stanbic Bank Uganda Limited, the anchor subsidiary.
“The first six months of 2021 have been quite challenging especially with the second wave of Covid-19. Businesses and individuals have felt the impact of the pandemic and as an institution we have done much to support our customers, our staff, and communities through this unprecedented period,” Andrew Mashanda, the Chief Executive of Stanbic Uganda Holdings Limited said during a news conference.
According to Stanbic’s half year financial results released on Friday August 6, 2021, customer deposits increased to UGX5.7 trillion in June 2021 compared to UGX5.2 trillion in June 2020, indicating an 9.5% growth. Its assets also grew by 9.8% driven by an increase in loans and advances amounting to UGX 3.8 trillion compared to UGX 3.4 trillion in June 2020. SUHL earned UGX154.9 billion in Profit after tax (PAT) representing an impressive 21.5% growth from the same period last year.
Apart from Stanbic Bank Uganda Limited, other SUHL subsidiaries are: Stanbic Properties Limited; Stanbic Business Incubator Limited; FlyHub Uganda Limited, and SBG Securities Uganda Limited. The creation of the holding company corporate structure started in 2018 and was completed in 2020.
Mashanda said, “Despite the attendant challenges, we waded through, to post what our shareholders will appreciate as resilient performance, with good growth across all key performance indicators. Our Return on Equity stood at 23.2% up 1.6% year on year. This strong performance was led by our anchor and largest subsidiary, Stanbic Bank Uganda limited (SBUL).”
Anne Juuko, the Chief Executive of Stanbic Bank Uganda said, “We saw significant growth in our small and medium enterprises segment as we continued to support them through this challenging period. Overall, through our financing to boost private sector growth, we saw loans and advances grow by 9.8% to UGX 3.8 trillion from UGX 3.4 trillion in June 2020.”
She said, “We made deliberate interventions to drive economic recovery in a number of ways including the creation of the Enterprise Economic Restart fund (EERF) that aims to raise and provide up to UGX 350 Billion ($100 Million) in low-cost financing to sectors and groups impacted by the pandemic. We also launched a new value proposition aimed at revitalizing the operations for SACCO’s and VSLA’s across Uganda. The bank has so far provided UGX 5.1 billion in financing that has reached over 261,497 members.”
Growth in PAT was mainly driven by strong growth in trade revenue which accounted for UGX 37.5 billion as well as better management of loan impairments, which reduced by UGX 11.7 billion as compared to the same period last year.
The company remains well capitalised above the minimum regulatory requirement, ensuring that it is in a strong position to continue financing the private sector through the second half of the year.
Juuko said, “In continuing to honour our commitment to support communities, we invested over UGX 2.1 billion into Corporate Social Investment initiatives. We made tangible contributions to education through the National Schools Championship programme reaching over 60,000 students; promoted better access to Health Care through the Maternal Health drive; and joined the fight against Covid-19 with a donation of over UGX 200 million to the Ministry of Health providing oxygen cylinders and PPE for front line workers.”
The bank’s focus in the first half of the year was on how to achieve a fine balance between growing shareholder value while supporting customers to remain resilient through the pandemic.
“This performance shows that we were successful in growing shareholder value while supporting our customers to remain resilient; we achieved this through a number of innovative initiatives which we intend to sustain through the second half of the year and beyond,” Juuko said.
Mashanda said, “Our priority for the next half is to focus on investing in technology and digital solutions to enhance our service offerings and customer experience. We shall also focus on continuously managing our risks across all areas of operations to ensure business continuity and implement the sustainability priorities as a true testament to our purpose-Uganda is our home, and we drive her growth.”