A photomontage of bank Chief Executive Officers and Managing Directors
Uganda’s banking sector registered emphatic performance in 2022 reflecting a strong post-Covid-19 economic recovery. Despite the prolonged uncertainty of the global and local economy due to the Russia-Ukraine war and the associated impact on the global economy as well as the Ebola outbreak in Uganda, commercial banks posted impressive results across all key performance parameters in 2022.
For the last seven years ago, Business Focus has exclusively analyzed the performance of banks based on their financial statements.
This website interprets and reports these financial statements in a simple and easy-to-understand manner.
For starters, commercial banks are required by law to publish their financial statements/results for the previous year (which ends every 31st December) in a national newspaper before May of the following year.
It’s against this background that banks have in the last one month been releasing/publishing their audited financial statements for the year ended 31st December 2022.
This website has exclusively compiled and analyzed the results so as to help customers, partners and stakeholders of these financial institutions to know how their banks performed and help them make informed decisions.
This analysis is also important for students with a bias in banking finance as well as policy makers.
It is important to note that Uganda currently has 25 banks.
During the year (2022), Afriland First Bank Uganda Limited which joined the Ugandan market in September 2019, collapsed.
“Afriland First Bank (U) Ltd’s decision for voluntary liquidation was an outcome of the strategic business review by the shareholders, Afriland First Group,” Michael Atingi-Ego, the Deputy Governor at BoU, said.
According to the bank’s audited financial results for the year ended 31st December 2021, Afriland First Bank was an undercapitalized financial institution.
Whereas BoU’s minimum capital requirement was Shs25bn, Afriland First Bank’s core capital stood at Shs19bn in 2021, down from Shs26.75bn in 2020.
Record Profit
According to the 2022 results, out of the 25 banks, 23 banks made a record net profit of Shs1.29 trillion in 2022, up from ShsShs1.081 trillion posted by 18 banks in 2021. This is the highest profit recorded by banks in Uganda’s banking industry history.
Only two banks made losses totaling to Shs13.34bn compared to eight (8) banks that made a net loss of Shs79.82bn in 2021.
It’s also important to note that out of the 25 banks, only three banks (Centenary, Housing Finance and PostBank) are indigenous banks.
Additionally, unlike a decade ago, Ugandans are increasingly taking over key managerial positions in the top banks. For example, among the top 10 most profitable banks, six (6) are headed by Ugandans as Chief Executive Officers (CEOs) or Managing Directors.
Most Profitable Banks
Stanbic Bank Uganda Ltd (SBUL) maintained its number one position as Uganda’s most profitable bank. Headed by Anne Juuko as Chief Executive, Stanbic Bank made a record profit of Shs366bn in 2022, up from 275.43bn in 2021. This represents an increase of 32.89%.
In terms of industry market share, Stanbic which is listed on the Uganda Stock Exchange (USE), enjoys 28.66% of the total industry profit.
Juuko attributed the bank’s top notch performance to the initiatives the lender came up with during the COVID-19 pandemic.
“During the pandemic, between 2020 and 2021, we banked on bold initiatives that were aimed at supporting our customers to go through the tough times; it is those initiatives that bore fruit last year,” Juuko said, adding: “In 2022, we saw more customers partner with us across the retail and business banking segments—a
demonstration of their trust in our brand. We registered a 30 percent increase in the volume of transactions, compared to 2021.”
She said the bank is serving over one million customers.
Centenary Bank, an indigenous bank headed by Fabian Kasi as Managing Director, also maintained its position as the second most profitable bank in Uganda.
This is after the bank posted Shs249.6bn net profit in 2022, up from Shs211.51bn recorded a year earlier. This represents 18.01% increment. Its industry market share under the profit category is 19.55%.
Absa Bank Uganda also maintained its position as the 3rd most profitable bank in the country. Headed by Mumba Kalifungwa as Managing Director, Absa’s profit grew by 28.9% to Shs141.16bn in 2022, up from Shs109.51bn in 2021. This gives it an industry market share of 11.05% under the profit category.
It’s followed by Bank of Baroda in 4th position that was occupied by Standard Chartered Bank in 2021. Bank of Baroda’s profit grew by 35.41% to Shs122.18bn in 2022, up from Shs90.23bn recorded a year earlier. This gives Bank of Baroda an industry market share of 9.57% under this category/parameter. The good performance was delivered by Raj Kumar Meena, who resigned as the Managing Director of the bank effective 15th March 2023. He has since been replaced with Shashi Dhar as MD.
In 5th position is Housing Finance Bank that is headed by Michael Mugabi as Managing Director. The indigenous bank that is largely owned by the Government of Uganda saw its profit grow by 42.79% to Shs58.5bn in 2022, up from Shs40.97bn in 2021.
This gives the lender an industry market share of 4.58% under the profit category.
The top five most profitable banks control 73.41% of the industry profit market share, leaving 20 banks to share 26.59%.
Citibank Uganda that is headed by Sarah Arapta as CEO, occupies the sixth position after its profit reduced by 5.26% to Shs52.39bn in 2022, down from Shs55.3bn recorded a year earlier. It’s market share under this category stands at 4.1%.
In 7th position is Equity Bank. The bank will have a year to forget after its profit reduced by 46.8% to Shs45.75bn in 2022, down from Shs86bn in 2021. Its industry market share under this 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, who was the 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.
Standard Chartered Bank Uganda is now the 8th most profitable bank in the country, having lost its 4th position. Headed by Sanjay Rughani as Managing Director, StanChart as it’s commonly called, hasn’t had a stable CEO in recent years.The bank saw its profit decline by 53.09% to Shs44.23bn in 2022, down from Shs94.28bn in 2021. Its market share under the profit category is 3.46%.
It’s followed by Diamond Trust Bank (DTB) in 9th position. Headed by Varghese Thambi as Managing Director, DTB profit increased by 16.07% to Shs35.76bn in 2022, up from Shs30.81bn recorded a year earlier. It’s market share under this category is 2.8%.
For the first time in its history, KCB Uganda made it to the top 10 most profitable banks in Uganda. Headed by Edgar Byamah as Managing Director, KCB saw its profit increase to Shs32.88bn in 2022, up from Shs7.35bn recorded a year earlier. This gives the lender a market share of 2.57% under the profit category.
The top 10 most profitable banks control 89.92% of the industry market share under the profit category.
Like in 2021, male CEOs dominate the top 10 most profitable banks. Among the top 10 most profitable banks, only two banks are headed by a female CEO/MD; Anne Juuko of Stanbic Bank and Sarah Arapta of Citibank.
Check for more details about the most profitable and loss-making banks below.
Bank-Net-Profits-2022Others
Dfcu bank is the 11th most profitable bank in Uganda. Dfcu has for many years been among the top five most profitable banks.
dfcu bank saw its net profit grow by 132% to Shs30.64bn in 2022, up from Shs13.21bn recorded a year earlier. Its market share under this category is 2.4%.
In January this year, Mathias Katamba, who was the Managing Director at dfcu left the bank and William Ssekabembe replaced him in Acting Capacity.
The bank has since appointed Charles M Mudiwa, a Zimbabwean national, as its substantive Managing Director.
A statement from the Board of Directors of dfcu Limited, the parent company of dfcu bank, underpinned the Company’s continued strategic and ongoing investments in technology to further strengthen its ability to serve changing customer needs.
“The Company deployed enhancements to the core banking platform, online, mobile and agency banking channels to improve customer experience. The new digital capabilities have further improved operating efficiency, enabled new ways of working and ultimately reduced the cost to serve customers,” the statement said.
Banks that moved from a loss-making position to the profit zone in 2022 include NCBA (Shs22.79bn), Tropical Bank (Shs7.42bn), I&M Bank (Shs5.61bn), Ecobank (Shs401m) and Opportunity Bank (Shs212m).
It should be noted that I&M Bank that was formerly Orient Bank rebranded to I&M Bank Uganda in 2021 after Kenya based I&M Group Plc became the major shareholder of Orient Bank, with a 90 percent stake in April 2021. I&M Bank Uganda is headed by Sam Ntulume as Ag. CEO/MD.
Additionally, earlier on in 2020, Commercial Bank of Africa merged with NC Bank to form NCBA.
PostBank which became a fully fledged bank in December 2021, having operated as a credit institution for many years, also continues to perform well. Headed by Julius Kakeeto as CEO/MD, PostBank profit grew by 23.96% to Shs15.16bn in 2022, up from Shs12.23bn in 2021.
Loss-making Banks
As earlier stated, only two banks (United Bank for Africa and Cairo Bank Uganda) made a loss in 2022.
United Bank for Africa (UBA) Uganda has literally failed to hit the ground running. The bank has posted poor results for many years. Headed by Chioma A. Mang as Managing Director, UBA made a loss of Shs8.07bn in 2022 from Shs10.34bn loss recorded in 2021.
Cairo Bank Uganda made a loss of Shs5.27bn in 2022 from Shs1.87bn loss in 2021. The bank’s NPLs increased to Shs21.06bn in 2022, up from Shs8.73bn in 2021. It should be noted that Ahmad Maher Nada left the bank as Managing Director at the end of last year. Sylvia Jagwe Owachi, the Executive Director took over as the Ag. Managing Director.
Outlook for 2023
Stanbic’s Juuko says the they “shall continue to strengthen risk management even as we made significant progress across the organization—we recognize that operational risk remains a challenge, particularly in light of the cyber incidents in the financial services industry that have started to occur more frequently.”
Looking ahead, dfcu says it will focus on executing its strategy anchored on ‘Customer Obsession’ whilst transforming lives and businesses through innovative solutions and empowered people.
DTB’s Varghese Thambi says: “We will continue to invest in our people, systems and processes to improve our internal efficiencies and agility. We are also leveraging the power of partnerships, to scale the impact of our solutions and initiatives. We are looking at a future where we will go beyond banking by positioning ourselves as a technology firm with a banking license.”
Grace Muliisa, the Managing Director at Ecobank Uganda says: “Looking ahead, we will continue to innovate and create value for our customers. Customer experience remains at the heart of our strategy and remain committed to provide relevant solutions through digitization and partnerships.”
Check for more details about the most profitable and loss-making banks below.
Bank-Net-Profits-2022We’ll continue giving you unmatched analysis about the performance of banks in 2022 and beyond. For tips, opinions and advertising, Tel: 0775170346/0703828741/staddewo@gmail.com. Follow us on Twitter: @TaddewoS @BusinessFocusug
