Stanbic Uganda weathers Covid-19 to report rise in customer deposits

August 24, 2020 in Business, Companies, Finance, Financial Services by Editor

Stanbic’s Chief Executive, Anne Juuko said customer deposits grew by UGX 1.1 trillion a 27.3% year-on-year growth.

Stanbic Bank Uganda (SBU) demonstrated resilience during the first half of 2020, despite a difficult operating environment brought on by the Covid-19 pandemic and the resulting global economic downturn.

Compared to the same period last year, Uganda’s largest financial institution by assets, reported a slight fall in profits between January and June 2020, but customer deposits were up by nearly a third.

Patrick Mweheire, the Chief Executive, Stanbic Uganda Holdings Limited (SUHL) to which SBU is a subsidiary said, “Despite a challenging first half, Stanbic Uganda has demonstrated resilience as highlighted by the first six months performance.  We have also made significant strides towards achieving the strategic objectives as set out in 2018 of creating the opportunity for Stanbic to venture into other non-banking services that would enhance value of products and services provided to our different stakeholders and ultimately increased shareholder value.”

“Among the key achievements, SUHL successfully established two new subsidiaries: Stanbic Properties Uganda Limited, that will hold and manage the real estate portfolio and Stanbic Business Incubator Limited, which will manage enterprise development on behalf of the holding company and its subsidiaries. This brings the total of subsidiaries under the holding company to three, in addition to the bank which was its first subsidiary,” he said.

Speaking to the Bank’s performance as the largest subsidiary of Stanbic Uganda Holdings Limited, Anne Juuko, Stanbic Bank Uganda’s Chief Executive said, “Stanbic’s performance in this first half has shown the banks resilience and commitment to implementing a robust strategy in the current economic conditions. Customer deposits grew by UGX 1.1 trillion a 27.3% year on year growth. This growth was enabled by our strong client ecosystem engagement and simplifying client on-boarding. Loans and advances increased by UGX 661 billion, 24% year on year growth registered across our varied client segments on working capital and term financing. We reported Profit After Tax of UGX 127.7 billion 4.9% down from UGX 134.1 billion the previous year, due to the impact of Covid-19 Pandemic on client business.

The first Covid-19 case was reported in Uganda towards the end of March. The government subsequently announced a series of national lockdowns and other counter measures to limit the spread of the disease. The economy was adversely affected by the restrictions on movement and closure of businesses up until the end of May when the most recent lockdown was lifted.

Referring to Stanbic’s response to the situation, Ms. Juuko said, “Amongst our priorities, we offered credit relief programmes to business and personal customers tailored to meet their needs and their businesses are sustained and the impact on the economy is minimised. In addition, we waived all charges on our digital banking platforms so that customers could transact free of charge on our platforms. We also continued to provide banking services and kept 80% of our branches open to ensure our customers had access to our services.”

She said the Bank kept a promise to lower its prime lending rate (PLR) each time Bank of Uganda lowered its CBR. “We lowered our PLR twice during the period to 16% which is one of the lowest PLRs of all active retail financial institutions in Uganda. Our aim was to ensure our customers can benefit from more affordable lending rates,” Juuko said.

She added that Stanbic doubled their investment in Corporate Social Responsibility. “We increased our investment in CSI and doubled our spend to provide the much-needed support in communities and to the Government through the provision of protective gear and fuel for front line workers complimented by our partnership with the Uganda Bankers Association,” she said

Looking ahead, Juuko said, “Stanbic will focus its efforts on implementing initiatives to support the recovery of key sectors that were heavily impacted by the pandemic, especially the SME sector.

Our customers remain our core focus and our ability to reshape our strategy and continue to innovate solutions that meet their needs will be our priority. We are committed to our purpose, to drive Uganda’s growth and continue to take the necessary actions to support our clients and contribute to the growth of Uganda’s economy.