Stanbic, Uganda’s leading bank, has released its full year financial results for 2018 with the bank registering solid growth.
Announcing the results at a press briefing today Patrick Mweheire the Stanbic Bank Chief Executive said, “We maintained solid growth in our profitability registering a Profit After Tax of Ushs 215 billion up by 7% from Ushs 200 billion in 2017. This was largely driven by growth in our revenues, efficiencies under cost control and credit risk.”
Analyzing the bank performance, Patrick said 2018 had some challenges in the first half of the year characterized by low economic activity and low aggregate demand.
“We made a deliberate decision to match our Prime Lending Rates with the Central Bank Rate as it lowered. Therefore, we expected that there would be some pressure on our revenue side and as such we were deliberate about optimizing our cost structure to ensure that we could still deliver good returns despite these revenue pressures,” he said.
He continued, “As a sign of confidence in the bank’s resilience, our customer deposits maintained strong growth of 8% to Ushs 3.9 trillion from Ushs 3.6 trillion registered in 2017. This led to a strong market share position of approximately 20%.”
He further explained that the bank heavily invested in a customer centric model of operation. This enabled the bank to create innovative solutions and channels which have helped improve convenience for the customer while bringing down transaction costs.
“Digital channels have enabled us to see overall transaction growth of over 25% year on year basis with transactions on these alternate channels growing by over 40%. As at end of 2018, approximately 80% of our transactions were being done on our alternative digital channels,” he explained.
Commenting on the bank’s key performance indicators, Mr Sam Mwogeza, the Stanbic Chief Financial Officer revealed the bank reported improvement across all key financial metrics.
“We recorded a double digit growth in our loan book which recorded an annual growth of 18% in 2018 growing to Ushs 2.5 trillion from Ushs 2.1 trillion in 2017. This resulted in a market share gain for the bank of 20% from 19% at the start of the year. This was driven by private sector credit growth around sectors like manufacturing, trade, building and construction and household lending. We were very particular with the sectors that we lent money to and we availed more credit to those sectors that we saw a higher growth rate rebounding. As such that enabled us to be more proactive in seeing the switch in borrowing appetite and requirements from clients in those sectors as they began to pick up momentum,” he added.
The bank earnings per share also went up to Ushs 4.2 in 2018 up from Ushs3.9 the previous year.
“Our Shareholders will be pleased to hear that based on the banks strong performance the dividend increased by 8% to Ushs 97.5billion with the dividend pay-out ratio increasing to 45% supported by strong profitability and capital position,” He said.
Following the bank’s solid performance, Stanbic recently received the award for best bank in Uganda at the 2019 Global Finance 26th Annual Best Bank Awards. This prestigious accolade is an incredible achievement that demonstrates the bank’s commitment to service excellence and delivering solutions that meet the client’s needs.
Looking forward Patrick said, “We are more focused on supporting customers on their different journeys and we are going to be more intentional about having the right set of discussions to spur their growth.”