Stanbic Bank Uganda Ltd (SBU) has recorded Shs95.4bn net profit in its half year results for 2017, down from Shs107.2bn recorded in the year ended June 2016. This represents a decline of 11%.
Releasing the results on Tuesday morning at Serena Hotel, Kampala, Patrick Mweheire , the Stanbic Bank Uganda Chief Executive Officer, attributed the bank’s performance to the continued drop in interest rates plus slower than expected credit uptake.
“This plus slow economic activity and the flat currency all led to a drop in the profit after tax,” he said, adding that demand for credit across the sector has remained subdued.
The bank also registered a 6% decrease in total income to Shs314bn in June 2017, down from Shs334bn in June 2016.
However, loans advanced to customers’ increased to Shs2trn in June 2017, up from Shs1.86trn in June 2016. Customer deposits also increased to Shs3.2trn in June 2017, up from Shs2.6trn. The bank’s total assets also increased to Shs4.7trn, up from Shs4.5trn for the period under review.
Mweheire noted that the economic environment has remained subdued, a thing that is going to affect performance of banking industry in 2017.
He noted that although their profits fell, they had a solid performance in a challenging economic environment. “We have reported a solid performance despite a subdued economic environment due to our diversified businesses and relentless focus on the customer,” he said. He is however optimistic that the economy continues to recover.
“We are optimistic that the economy will grow faster as individual and commercial borrowers take advantage of much lower interest rates,” he said, adding that SBU has reduced its prime rate by 5% over the last one year.