Bank of India (BOI) Uganda is one of the most profitable banks especially among the new ones.
Although it has less than 1% industry market share, BOI has been posting profits since it rejoined the Ugandan market in 2012.
It was the 14th most profitable bank in 2017 out of the 24 operating banks in Uganda.
It made a net profit of Shs3.5bn, up from Shs2.3bn in 2016, representing 52.17% growth.
Its total assets also increased to Shs168.913bn in 2017, up from Shs156bn in 2016. This represents 0.64% industry assets market share.
The bank’s loans advanced to customers increased to Shs85.60bn in 2017, up from 71.90bn a year earlier, while customer deposits increased to Shs114bn in 2017, up from Shs99.1bn.
Positively, the bank’s Non-Performing Loans (NPLs) is one of the lowest in the market.
Its NPLs increased to Shs43m in 2017, up from Shs38m the previous year.
Ajah Panth, the Bank of India Uganda Managing Director says that their strategy is unique; their focus is to make profit whilst serving customers better.
“Our market share is less than 1% but profitability is increasing every year,” Panth said in an exclusive interview with Business Focus.
He added: “our performance and market share have been growing since 2012. We are happy to be profitable and grow our market share steadily.”
He noted that the bank has two branches (all based in Kampala), but they won’t rush to open more branches because many banks are closing and merging branches.
“Agency banking is on the cards. It could be launched in the 2nd half of the year. We have a very good experience in agency banking back in India,” he said.
He revealed that in 2017, the bank’s loan portfolio grew by 20%, but five months into 2018, they have already registered 23% growth.
“Our target is to see loans advanced to customers grow by over 40% in 2018. We also want our profit to grow by over 40% this year,” he said.
Asked why they are not big on internet banking, Panth said they have internet banking although customers can only view transactions made, but can’t transact online; they have to walk into the banking wall.
“Cyber crime is still high in this region,” he said, adding that for customers to carry out transactions, they have to request the bank.
“It is true customers are more demanding than ever before, but our customers are committed to the bank. They understand us and we offer them the best,” he said, adding: “There are a few banks that have allowed banks to use internet fully.”
He revealed that most of the bank’s loan portfolio is in US dollars.
“Our weighted average lending rate for dollars is 9% while for Shilling denominated loans it is less than 18%. Our interest rates are one of the lowest in the market,” he said, adding that this explains why their NPLs have been low.
He says high interest rates have resulted into increased industry NPLs.
He revealed that Bank of India is very strict with lending, a thing that has seen the bank attract quality assets.
He added that banks internationally are moving away from lending to high risk areas to low risk areas in order to avoid high NPLs.
“The quality of lending is very important and explains why we have been profitable since inception,” he said.
Bank of India Uganda employs over 30 people and targets mid corporates, SMEs (Small and Medium Enterprises), retail customers as well as large corprates. It has over 3,000 customers.