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THE TRUTH: Why Housing Finance Bank Is Seeking Shs61bn Capitalization From Gov’t

Housing Finance Bank is reportedly seeking Shs61bn Capitalization from government to meet the ‘new capital requirements’ by the Bank of Uganda (BoU). However, that’s far from the truth.

Justine Bagyenda, the Executive Director in charge of Supervision at BoU says the Central Bank hasn’t put in place new capital requirements, noting that the issue of Housing Finance Bank seeking Shs61bn capitalization wasn’t properly articulated.

BoU’s minimum capital requirement for commercial banks remains Shs25bn.

It should be noted that in November 2017, State Minister for Finance David Bahati told the Finance Committee of Parliament that the money is required to meet new capital requirements by the Central Bank which asked commercial banks to raise their share capital.

Bagyenda reveals that Housing Finance is seeking more capital for business reasons.

“Previously, Housing Finance Bank was a mortgage based bank. The bank has since diversified [into other products]. The Capitalization is therefore to help the bank keep pace with the industry and be competitive,” Bagyenda told Business Focus.

From being a Mortgage and Development Bank, Housing Finance Bank now also offers Retail and Business banking as well as Investment and Treasury services.

Bagyenda added that Uganda’s banking sector is currently “sound and solid.”

The government, with 49.18 percent shares, owns the bank jointly with National Social Security Fund -NSSF (50 percent) and the National Housing and Construction Company (0.82 percent).

Housing Finance Bank’s capital base currently stands at 61 billion Shillings and needs to be doubled to 122 billion Shillings.


Housing Finance Bank, one of the three indigenous banks in Uganda recorded Shs18bn net profit in 2016, up from Shs14.6bn in 2015.

Its loans advanced to customers increased to Shs401.4bn in 2016, up from Shs367.8bn in 2015.

Customer deposits also increased to Shs353bn in 2016, up from Shs306bn in 2015.

The banks’ total income also increased to Shs113.2bn, up from Shs94.6bn in 2015.

The bank’s total assets also increased to Shs680.2bn in 2016, up from Shs618.5bn in 2015.

However, Non-Performing Loans (NPL) almost more than doubled, hitting Shs30.5bn in 2016, up from Shs16.5bn recorded a year earlier.

Housing Finance Bank is under the stewardship of Mathias Katamba as Managing Director.


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

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