Stanbic Uganda posts Sh366bn net profit in 2022

Stanbic Uganda has reported a robust performance in 2022, with gross revenue totaling one trillion shillings and a Profit After Tax of Ush366 billion, demonstrating a significant year-on-year growth of 33 per cent. The lender also facilitated the collection of Ush. 7.5 trillion on behalf of the government, representing a 33 per cent increase in total remittances by banks. In a recent interview with CNBC Africa, Ronald Makata, the Interim Chief Finance Officer, discussed the bank's impressive performance and strategies that contributed to its success. Makata highlighted the bank's effective cost management despite operating in a challenging economic environment with close to 10 per cent inflation. He noted that the bank was able to contain its costs, which grew by only about 3 per cent, leading to a cost-to-income ratio of approximately 47 per cent for the year, falling below the 50 per cent mark for the first time. Additionally, the bank successfully reduced its credit impairments from 1.8 per cent to 1.5 per cent year-on-year, resulting in an improved return on equity of 21 per cent. One of the key strategies that propelled Stanbic Uganda's performance was the focus on growing its transactional activities and balance sheet. The bank increased its loans and advances by about 7 per cent and invested in high-yielding assets such as government securities to drive interest income. Furthermore, the bank's well-diversified income sources, including both interest and non-interest income, contributed to the overall revenue growth. Non-interest income accounted for 43 per cent of the total revenue, driven by customer engagement in structured products and foreign currency transactions. Moreover, Stanbic Uganda's digital channels played a pivotal role in expanding its customer base, surpassing the one million mark. The bank saw significant growth in digital offerings, such as FlexiPay, attracting approximately 500,000 customers within a short period. The strong performance in customer acquisition through digital channels underscored the evolving preferences of customers towards mobile banking. Despite the challenging economic landscape characterized by record inflation, volatile labor markets, and a crypto market crash, Stanbic Uganda managed to grow its loan book by 7 per cent while reducing non-performing assets from 4 per cent to 2.9 per cent. Makata attributed this success to the bank's proactive approach in supporting customers during the pandemic, offering moratoriums and implementing prudent credit risk management strategies. Looking ahead to 2023, Stanbic Uganda anticipates various challenges, including geopolitical tensions and global economic events that could impact the region. The bank remains vigilant in monitoring these factors to mitigate risks and ensure continued prosperity. With a positive outlook on the country's economic indicators, including a decrease in inflation, Stanbic Uganda aims to capitalize on the improving business environment for sustained growth and support to its customers. In summary, Stanbic Uganda's strong financial performance in 2022 reflects its resilience and strategic foresight in navigating turbulent economic conditions. The bank's focus on cost management, diversified income streams, digital innovation, and customer-centric approach have been instrumental in achieving impressive growth and maintaining a solid financial position in a challenging operating environment.