Stanbic Bank chief executive officer Patrick Mweheire. Courtesy photo.
Yet another indicator of the pressing economic times Ugandans are living with was confirmed this afternoon with Stanbic Bank announcing less than anticipated growth with half the business year gone.
The market leader’s top official put a brave face on his pronouncement that whereas the bank still made money the till was not as full as they would have preferred.
“We have reported a solid performance despite a subdued economic environment due to our diversified businesses and relentless focus on the customer ” Patrick Mweheire the Chief Executive of Stanbic Uganda explained.
“Supporting trade and infrastructure played a key role in our performance as we grew our off balance sheet exposure to an excess of Shs 1 trillion in support of the development of our nation. This provided a much needed buffer from a challenging economic environment characterised by low private sector credit growth and low aggregate demand.
“We are optimistic of the second half as the downward revisions of the Central Bank Rate (CBR), four times in the first half of the year begin to stimulate borrowing and much-needed private sector credit growth necessary to jump-start the economy.”
Uganda’s economy has been stuck in a slump over the last 12 months. And it seems no amount of coaxing by the central bank has been able to shake it out of this lethargy with private borrowers falling away and several banks looking at worrying expansions in their non-performing loans portfolio.
Prices of essential commodities also continue to rise in the face of what many business owners say is a punishing taxation regime being ruthlessly implemented by the government.
Across the board, business is slow. Job losses have already been witnessed as companies are forced to downsize in order to stay afloat.
Probably recognisning the damage his high taxes are having on things, President Museveni this week directed that the informal sector, a segment which makes for more than half of the country’s cash economy, should not be forced to pay undue levies and assorted fees.
It is in this environment that Stanbic Bank still reported growth in customer deposits by Shs 388 billion.
“Our loan portfolio [grew] by Shs 140 billion, off-balance sheet items by Shs 271 billion and registered profitability of Shs 95 billion,” Mweheire said.
Analysing how the bank’s performance impacted the wider economy, he further revealed that, “Stanbic collected tax in excess of Shs 1.75 trillion on behalf of the government of Uganda, through our large branch network. The bank and its employees – on its own – contributed a total of Shs 68.3 billion for the first six months of 2017.”
Looking towards the second half of the year, the top banker remarked: “We are optimistic that the economy will grow faster as individual and commercial borrowers take advantage of much lower interest rates. We have reduced our prime lending rate by 5% over the last twelve months and will continue to support our customers by introducing new products and services that make a difference.”
Stanbic, he said, will continue to invest in the communities “where we operate and spend a meaningful portion of our Corporate Social Investment budget supporting Early Childhood, Primary and Secondary education initiatives.”
