Stanbic Uganda Records UGX 412 Billion Profit After Tax

by Business Times
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Stanbic Uganda, a franchise of the Standard Bank Group, has released impressive financial results for the fiscal year ending December 2023.

The institution announced a profit after tax of UGX 412 billion, up 15.2% from UGX 357 billion the previous year.

Several key highlights contributed to this growth. Notably, customer deposits witnessed a healthy increase, rising from UGX 6.1 trillion to UGX 6.3 trillion. In addition, the bank’s total assets swelled from UGX 9.1 trillion to UGX 9.3 trillion. The bank’s net loans and advances also experienced robust growth, going up from UGX 4.1 trillion to UGX 4.2 trillion.

The major contributor to Stanbic Uganda’s performance is its lending schemes geared toward financial inclusion which have in turn propelled the institution’s revenue to UGX 1.19 trillion, up from UGX 1.04 trillion.

The report shows that the bank provided more than UGX 160 billion in affordable loans to smallholder farmers and women-owned businesses.

Stanbic Uganda Holdings Limited’s CEO, Francis Karuhanga, credited the franchise’s excellent performance to the resilience of its flagship entity, Stanbic Bank.

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

Anne Juuko, the CEO of Stanbic Bank Uganda, stated that due to the prevailing high interest rates in 2023, the bank had to come up with innovative approaches to ease the burden of borrowing on its clients.

Over the last four years, the bank has been able to devise such approaches, which has enabled smallholder farmers, women-owned businesses, civil servants, and the government of Uganda to access credit under friendly and flexible terms.

“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 UShs 369 billion in 2023 from UShs 309 billion the previous year—2022,” said Juuko.

Performance Outlook

In 2023, Stanbic disbursed more than USh 160 billion in affordable loans through various programs. These programs included SACCO lending, capacity building, and Stanbic4Her, which specifically supports women-owned businesses. Stanbic4Her alone disbursed loans worth nearly USh 80 billion at a rate of 15.5%. Additionally, over 50,000 women underwent capacity building training. More than 2 million members from 6,000 SACCOs accessed affordable credit at 10%, totaling USh 85 billion. This initiative indirectly impacted 10 million Ugandans.

FlexiPay, Stanbic Uganda’s digital wallet solution, experienced significant growth in user adoption. The number of wallets increased from 390,000 to over 840,000, resulting in a transaction value of USh 464 billion in 2023.

Stanbic Uganda’s revenue increased to USh 1.19 trillion in 2023. The operating costs amounted to USh 584 billion. Out of these expenses, Stanbic reported that USh 169 billion was paid to local suppliers, which is more than the USh 137 billion paid in the previous year.

“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,” said Karuhanga.

Karuhanga indicated that Stanbic Bank had paid USh 354 billion in taxes, which is an increase from the USh 272 billion paid in the previous year. Karuhanga expressed the bank’s pride in being one of the top ten largest taxpayers in the country, stating that the banking subsidiary alone paid USh 314 billion in taxes.

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 record-keeping.

The Uganda National Oil Company honoured the Stanbic Business Incubator as the best local content partner, in appreciation of its contribution to supporting local enterprises to participate in the oil and gas economy.

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