Annual Performance: Stanbic Bank Registered Ush 191Bn Profit in 2016

Stanbic Bank Chief Executive Officer, Patrick mweheire

Banking giant Stanbic Uganda has Wednesday announced it’s 2016 performance results reflecting a 21% growth in revenue and 25% growth in total deposits compared to the 2015 fiscal year.

The bank made Ush 643 billion in revenue making a profit of Ush 191 billion after tax from a Ush 151 billion profit that was posted in 2015. Net profits grew by double digit (27%) in 2016 despite a 44% decline in profitability in the general banking industry.

In the same year, this Stanbic processed over Ush 50 trillion worth of transactions with the customer loan book soaring by 3% despite the challenging economic environment. By end of 2016, capsule Stanbic’s closing balance was at Ush 1.98 trillion up from Ush 59 billion the previous year.

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As at December 31 in 2016, Stanbic had a market capitalization of Ush 1,280 billion which is so far the largest by this measure in Uganda. So far, the bank commands a 30% market share.

Earnings per share grew by 14% to Ush 3.73 in 2016 for its 22,535 shareholders with total assets worth Ush 4.58 trillion. The bank contributed Ush 73 billion in taxes to the government treasury.

Patrick Mweherire the Stanbic Uganda CEO described 2016 as “another record year for the bank that reflected solid performance across our businesses”.

“We had double digit growth in deposits and showed expense discipline while continuing to invest for the future. As Stanbic we have continued to match the Central Bank Rate and so far, we have the lowest prime lending rate at 19.5%,” Mweheire said during the announcement at Kampala Serena Hotel.

He however decried the increasing cost of doing business in Uganda which affected Stanbic’s cost to income ratio in both its corporate and public banking 2016. The ratio grew by 1.5% from 53.6% in 2015 while credit loss ratio increased to 1.8% with a 0.3% drop in asset quality.

“Cost to income ratio is a pertinent issue but it all comes down to the penetration of banking which is still low at 30% in Uganda compared to Kenya which is at 70%,” Mweheire said.

Stanbic Bank’s Non Perdforming Loans (NPLs) went up by 10% (Ush 14 billion) year on year but this reflected in the overall industry with deterioration of asset quality. In the entire industry, NPLs grew by 110% from Ush 573billion in 2015.

This was largely driven by 2015’s high interest environment coupled with high exchange rates along with the instability in South Sudan.

Going forward, Mweheire said the Ugandan economy is bound to gather momentum especially with the prospects in the oil and gas sector.

“About Ush 4bn is going into the oil pipeline, Ush 9bn into upstream development, Ush 3.5 bn into the refinery and about Ush 0.5billion into other infrastructure,” he said.

“We are talking about Ush 16 billion of investment going into a country with a GDP of 33% between now and 2020. That is a humongous investment for a country like Uganda but we need policy decisions which can support local content and create jobs.”


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