Absa Bank Uganda reports 15.4% increase in full-year revenue

Absa Bank Uganda has reported a notable 15.4% increase in revenue for the year ending 2021, showcasing a strong performance in both corporate and investment banking as well as a recovery in retail and business banking sectors. In a recent interview on CNBC Africa, Managing Director Mumba Kalifungwa discussed the key drivers behind this impressive growth. He highlighted the resurgence in the manufacturing and construction sectors, signaling a positive shift following the challenges of 2020. During the interview, Kalifungwa addressed the question of loan provisions and their impact on the bank's strategy, clarifying that while recoveries on impairments contributed to profitability, the primary driver was revenue growth. He emphasized the selective growth in specific sectors of the economy and the success of Absa Bank Uganda's diversified portfolio. The conversation then turned towards the apparent contradiction between bank profitability and overall economic performance in the region. Kalifungwa attributed the bank's success to focused growth in key sectors, such as financial markets, manufacturing, and construction. He highlighted the significant growth in net interest income and fee income as key contributors to the bank's financial performance. Looking at the future, Kalifungwa expressed cautious optimism, citing geopolitical risks, rising input costs, and potential inflation as challenges that could impact growth in 2022. However, he remained positive about the prospects for double-digit growth, particularly with the improving COVID-19 situation and the opening up of sectors like tourism, presenting new opportunities for the bank. When questioned about the inflation challenge facing Uganda, Kalifungwa highlighted the country's strong monetary policy framework and the central bank's ability to respond effectively. He noted that while inflation rates were currently manageable, close monitoring and appropriate policy interventions would be crucial to maintain stability. Overall, Absa Bank Uganda's robust financial performance reflects a resilient approach to navigating challenging economic conditions, with a focus on strategic growth sectors and operational efficiency. As the bank looks towards the future, balancing growth opportunities with potential risks will be key to sustaining momentum and delivering value to shareholders and the broader economy.