Stanbic Uganda Holdings Limited (SUHL) has announced it grew its net profits by 11% in 2021 to earn shs.269billion from sh.242bn in 2020, driven mainly by strong growth in non-interest income earned by mostly Stanbic Bank Uganda Limited, its anchor subsidiary.
Other subsidiaries of SUHL include SBG Securities Uganda Limited, Stanbic Business Incubator, Stanbic Properties Limited, and FlyHub Uganda; however, these are largely new companies still in their formative stages to support the bank and serve its customers beyond offering traditional financial services.
Experts had expected poor performance given that 2021 was challenging, especially during the first three quarters when the Covid-19 pandemic peaked affecting several business activities across the country, including securities and banking.
But the group appears to have weathered the storm.
According to the financial results recently released, Stanbic Bank Uganda net profits in 2021 increased to shs275bn from the shs.243bn registered the previous year, largely driven by growth in trading income.
Non-interest revenue reported a strong growth of 19.0% seeing earnings of shs401billion from shs341billion the previous year. Much of the growth in the non-interest revenue was attributed to trading income which increased to shs233.7bn from shs177.3bn the previous year.
Net interest income for the year grew marginally by 1.5% to Ushs498 billion from shs490 billion the previous year attributed to slow growth in customer loans and lower margins as the country underwent a second lockdown in the middle of 2021.
The low economic activity in the year under review also informed low appetite in credit which saw marginal growth in the loan book to shs3.7trillion from shs3.6trillion the previous year, but maintained a 23.3% market share.
The bank said lending was guided by the need to avail credit to sectors that are critical to driving growth such as trading and manufacturing.
According to statistics released, the bank lent shs290 billion to the trade sector, which is the second highest employer in Uganda, shs225 billion to household lending, shs223bn to building and construction, shs218 billion to manufacturing and shs150bn to agriculture–the highest employer in Uganda.
Customer deposit grew
Customer deposits grew by 5% from shs5.4 trillion to shs5.7 trillion in 2021, attributed to sustained customer brand loyalty and service experience through offering financial solutions that are appropriate for their needs.
Stanbic’s financial position remained strong in 2021 with the capital adequacy ratio, which measures the ability of a bank to meet its obligations by comparing its capital to its assets, improving from 18% to 21.9%, a rise of 3.9 percent compared to 2020.