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Equity Bank Uganda Profit Falls By 46.8% As Non-Performing Loans Increase To Shs277.75bn

Anthony Kituuka, the Equity Bank Uganda Managing Director.

Equity Bank Uganda profit reduced by 46.8% to Shs45.75bn in 2022, down from Shs86bn in 2021, according to the bank’s audited financial statements for the year ended 31st December 2022.

According to the banking industry results analyzed by Business Focus, Equity Bank is now the 7th most profitable bank in Uganda in a market of 25 banks. Its industry market share under the profit category is 3.58%.

Equity Bank Uganda is headed by Anthony Kituuka as Managing Director. He was appointed to this position in November 2022 after Samuel Kirubi, the then Managing Director, was promoted to the position of Group Chief Operating Officer at the Equity Group Holdings Plc.

The sharp decline in profit could be due to the huge Non-Performing Loans (NPLs) the bank is grappling with. Its NPLs increased to Shs277.75bn in 2022, up from Shs78.78bn in 2021. Its NPL ratio stands at 17%, the second highest in Uganda’s banking sector.

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 nonperforming 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 bad debts written off increase to Shs34.79bn in 2022, up from Shs10.3bn recorded a year earlier. The bank was also under spotlight last year as some customers accused the bank of fraud after their money questionably disappeared off their accounts.

However, Kituuka will be convinced that the future is bright after the bank performed well on other key performance indicators.

The bank’s total assets increased by 19.59% to Shs3.37 trillion in 2022, up from Shs2.82 trillion in 2021. This makes the bank the 5th largest bank by assets with a market share of 7.42%.

Equity bank also saw customer deposits increase by 20.61% to Shs2.75 trillion in 2022, up from Shs2.28 trillion in 2021. This makes Equity the 3rd largest bank in Uganda by customer deposits with a market share of 8.72%.

Equity’s loans advanced to customers grew by 5.57% to Shs1.63 trillion in 2022, up from Shs1.54 trillion in 2021. With a market share of 8.54% under this category, Equity is Uganda’s 3rd largest bank by loans.

Taddewo William Senyonyi
William is a seasoned business and finance journalist. He is also an agripreneur and a coffee enthusiast.

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