Big fish in small pond Stanbic notches up $100m profit for 2023 topping previous figure by 15%

March 25, 2024 in Companies, Finance, Financial Services by Editor

The SUHL leadership lines up to take a bow after the announcement of final figures for 2023. SUHL runs five business units including Stanbic Bank, Stanbic Properties (real estate), SBG Securities (stock brokerage), Stanbic Business Incubator (SME training), as well as FlyHub (technology solutions) and collectively employs nearly 2000 people.

Stanbic Uganda Holdings Limited (SUHL), a franchise of the Standard Bank Group—Africa’s largest commercial lender by assets, has announced a profit-after-tax of UGX 412 billion (about $105 million) for the period ending December 2023 representing 15.2 pc growth from the UGX 357 billion earned the previous year. With operating costs at UGX584 billion, total revenues increased to UGX1.19 trillion (about $305 million) in 2023.

Announcing the latest results on Monday, SUHL Chief Executive, Francis Karuhanga said strong growth was due to sustained exceptional performance by its anchor business—Stanbic Bank across its retail, business, and investment banking portfolios.

He said, “Despite the operating challenge in 2023, our business demonstrated resilience and sustained double digit growth with Return on Equity of 22.5 pc and shareholder returns increasing to UGX 1.9 trillion in 2023 from UGX 1.78 trillion in 2022. As a result, we shall increase our dividend pay-out to 68 pc for the FY 2023, from 66 pc the previous year—subject to regulatory approvals.”

SUHL is listed on the Uganda Securities Exchange and runs five business units including Stanbic Bank, Stanbic Properties (real estate), SBG Securities (stock brokerage), Stanbic Business Incubator (SME training), as well as FlyHub  (technology solutions). Collectively SUHL employs nearly 2000 people.

Stanbic Bank Chief Executive, Anne Juuko said, given the prevalent high interest rates during 2023, “The bank had to devise innovative approaches, as we have done over the last four years—to ease the burden of borrowing on clients especially smallholder farmers, women owned businesses, civil servants, and government of Uganda which enabled them to access credit under friendly and flexible terms.”

She said, “For instance, in 2023, we boldly extended the repayment tenure of existing personal loans to up to seven years, from five and created the much needed legroom for top-up lending which enabled access to money to finance pressing needs such as school, medical and household expenses. As a result, our consumer loan book grew by UGX 369 billion in 2023 from UGX 309 billion the previous year—2022.”

According to latest figures, during 2023, the bank disbursed over UGX160 billion in affordable loans to farmers, women owned businesses, through the SACCO lending and capacity building programme, and Stanbic4Her.

Through Stanbic4Her alone, loans worth nearly UGX80 billion were disbursed at 15.5 pc while over 50,000 women have undergone capacity building trainings. Meanwhile, over two million members attached to 6000 SACCOs accessed affordable credit at 10 pc to the tune of UGX85 billion indirectly impacting 10 million Ugandans.

FlexiPay which is the bank’s response to the rising popularity of digital wallets in the industry saw good growth in users with wallets increasing from 390,000 to over 840, 000 generating a transaction value of UGX464 billion in 2023.

About a third of the bank’s expenses in 2023 or UGX169 billion was paid to local suppliers, compared to UGX137 billion paid to them the previous year. Karuhanga said, “We remain committed to supporting economic growth by giving business to local suppliers. Out of the 672 registered suppliers, at least 520 of them are local vendors; this has increased from 394 the previous year.”

In terms of taxes, Karuhanga said Stanbic paid UGX354 billion, up from the UGX272 billion in 2022. “We are proud to be among the country’s top 10 largest taxpayers. The banking subsidiary alone paid UGX314 billion in taxes,” he said.

Through the Stanbic Business Incubator, over 900 local businesses received capacity building training to enhance their efficiency in management, market competitiveness, bidding processes, tax management and recordkeeping.

The Stanbic Business Incubator was also honoured by the Uganda National Oil Company as the Best Local Content Partner for 2023—in appreciation of its contribution to supporting local enterprises to participate in the oil and gas sector.