The Independent Uganda: You get the Truth we Pay the Price
The bank’s low-cost payment solution, FlexiPay, now boasts over 900,000 clients and is gaining traction in both transaction numbers and volumes
Kampala, Uganda | THE INDEPENDENT | Stanbic Holdings Uganda Ltd (SUHL) recorded 17.6% growth in profit after tax to Shs 235.5 billion for the first half of 2024 on the back of robust revenue growth and improved asset quality despite operating in a challenging economic environment characterized with high inflation.
As such, the lender has proposed an interim dividend of Shs 2.73 per share, totalling to Shs 140 billion subject to regulatory approval.
The lender’s financial results released Friday shows that revenue for the period grew by 8.1%, bolstered by a significant rise in non-interest income, which increased by 17.2%. This diversification strategy paid off, with non-interest revenue contributing 43.2% to the total revenue pool.
Net interest income also saw a modest rise of 2.1%, supported by a 6.2% growth in costs, resulting in a positive Jaws ratio of 1.9%. The reduction in credit impairments, driven by an improved asset book and recoveries after write-offs, further strengthened the bank’s profitability.
“Our first-half results reflect our ability to navigate a dynamic operating environment marked by rising inflation and interest rates,” said Francis Karuhanga, Chief Executive Officer of SUHL. “Despite these challenges, our performance was commendable, and we remain focused on sustaining our growth trajectory.”
The bank’s customer loan book expanded by 9.5%, securing over 21% of the market share, while its off-balance sheet book surged by 17.5% to Shs 2.2 trillion, representing a market share of over 40%. These gains underscore Stanbic’s leadership as a key enabler of growth in crucial sectors such as construction, energy, health, and trade. The bank also prioritized the SME segment, recognizing its pivotal role in generating 70% of manufacturing output and creating 90% of new jobs in Uganda’s economy.
Assets too recorded growth
In terms of assets, SUHL recorded a 3.8% increase to Shs 9.7 trillion, placing the bank in a stronger position to support major development projects and facilitate economic growth. Customer deposits also grew by 4.9% to Shs 6.6 trillion, maintaining a market share of over 19%.
Digital transformation remains a cornerstone of Stanbic’s strategy, with significant investments in enhancing client experience and operational efficiency. The bank’s low-cost payment solution, FlexiPay, now boasts over 900,000 clients and is gaining traction in both transaction numbers and volumes. The platform, along with other self-service channels like internet and mobile banking, has significantly reduced branch traffic, enabling customers to bank conveniently and securely.
Optimistic outlook
Looking ahead, SUHL is optimistic about the remainder of the year, anticipating continued economic growth as borrowers benefit from potential cuts in the Central Bank Rate (CBR).
The executives said the bank remains committed to transparent pricing and maintaining competitive lending rates across the industry.
“Our priority is to ensure our clients’ needs are effectively met while continuing to invest in the communities where we operate,” Karuhanga added. “We are grateful to our customers, dedicated staff, and stakeholders for their trust and support, which have been instrumental in our success.”
As part of its commitment to sustainability and inclusivity, SUHL invested Shs 100 billion in SMEs, women, and youth enterprises during the period, with a particular focus on supporting farmers to adopt climate-friendly practices. The bank’s efforts in these areas are integral to its broader strategy of driving Uganda’s economic growth and supporting long-term development.
