Anthony Kituuka, who resigned as Equity Bank Uganda Managing Director
Equity Bank Uganda Limited announced the resignation of its Managing Director, Anthony Kituuka.
However, to those well versed with Uganda’s financial sector, the resignation may not come as a shocker.
Kituuka was appointed as Equity Bank Uganda Managing Director in November 2022, replacing Samuel Kirubi, who was promoted to the position of Group Chief Operating Officer at the Equity Group Holdings Plc, the parent company of Equity Bank Uganda.
Prior to his appointment, Kituuka served as the Executive Director- Equity Bank Uganda Limited from 2016. He previously served as the Executive Director for Regional Subsidiaries from 2014 to 2016. This means he has served the bank for a decade. He has definitely contributed to the growth of the bank over the years.
Kituuka’s performance at a glance
However, Kituuka’s two-year managerial stint was characterized by poor financial performance and scandals.
It was hoped that Kituuka would maintain this growth momentum. Has he performed up to the expectations of the bank’s shareholders? Bushiness Focus analyzes Kituuka’s performance based on key parameters. It’s important to note that Kituuka as the head of Equity Bank Uganda was responsible for the 2023 financial results and will be credited for the 2024 results that will be released early next year.
Exclusive Business Focus analysis shows that Equity bank made a net loss of Shs18.77bn in 2023. A year earlier, the bank had recorded a net profit of Shs45.75bn, down from Shs86 billion in 2021. This loss could be explained by the huge Non-Performing Loans (NPLs) the bank is grappling with.
The results show that Equity Bank has the second highest NPLs in the market as of December 31st, 2023. Equity’s NPLs increased to Shs363.97bn in 2023, up from Shs277.75bn in 2022. With loans worth Shs1.6 trillion advanced to customers in 2023, this gives the lender the NPL ratio of 22.74%.
According to the Bank of Uganda, NPLs are considered high when the NPL ratio exceeds 5%. NPL ratio is the ratio of the amount of NPLs in a bank’s loan portfolio to the total amount of outstanding loans the bank holds.
Business Focus results show that total industry NPL ratio stands at 5.37% as at 31st December 2023.
A Non-Performing Loan (NPL) is a loan in which the borrower is in default and hasn’t made any scheduled payments of principal or interest for a certain period of time.
In banking, commercial loans are considered non-performing if the borrower is 90 days past due. NPLs are subject to late repayment or are unlikely to be repaid by the borrower.
Equity bank also saw its bad written off debts increase to Shs60.75bn in 2023, up from Shs34.79bn in 2022.
In March this year, five Equity Bank Uganda staff members were remanded to Luzira prison on charges of conspiracy to defraud the bank of Shs62 billion through unsecured loans.
The suspects, Julius Musiime (Head of Agency Banking), Erina Nabisubi (Relationship Manager Telecom), Fred Semwogerere (Banker), Cresent Tumuhimbise Tibarwesereka (Relationship Officer), and Wycliff Asiimwe (Distribution and Marketing Consultant), are accused of being part of a scheme involving unauthorized debits and money laundering.
The prosecution alleges that between 2021 and 2024, the group obtained fraudulent loans by presenting unqualified individuals as legitimate borrowers. They are further accused of aiding in the concealment of the stolen funds.
Under Kituuka’s leadership, cases of customers’ money disappearing off their accounts have also been common.
Kituuka’s good record
Equity Bank’s loans advanced to customers also reduced by 20% to Shs1.6 trillion in 2023, from Shs1.62 trillion in 2022. Despite this small decline, Equity remains among the top banks. It’s the 4th largest bank by loans.
Under the assets category, Equity is also the 4th largest bank in Uganda in a market of 25 banks. Equity’s assets increased by 10.98% to Shs3.74 trillion in 2023, up from Shs3.37 trillion in 2022, giving the bank a market share of 7.55% under this category. When he took over, Equity was the 6th largest bank by assets.
Recognized as a Domestic Systemically Important Bank, Equity bank continues to perform well under the customer deposits category.
As of December 31, 2024, Equity Bank is Uganda’s third largest bank by customer deposits. Its customer deposits grew by 8% to Shs2.97 trillion in 2023, up from Shs2.75 trillion recorded a year earlier. When he took over, Equity Bank Uganda was the 6th largest bank by deposits.
The new Managing Director has an arduous task of reducing NPLs and fighting fraud (internal and external) if Equity bank is to record consistent and sustainable growth.
