KAMPALA – Absa Bank Uganda has Tuesday, April 16, 2024, released its 2023 financial results, reporting growth in customer loans, deposits, lending, revenues as well as net profit and assets.
The bank, a subsidiary of Absa Group, one of Africa’s largest financial services Groups announced that customer deposits in 2023, grew by 16.3% to UGX2.9 trillion.
The results are contained in the bank’s financial results for the year ended December 2023.
Mumba Kalifungwa, Managing Director, Absa Bank Uganda said the bank’s revenue also grew by UGX64 billion, reflecting a 15.6% growth from the previous year and resulting in a profit after tax of UGX146 billion.
Kalifungwa told reporters in Kampala that the bank’s revenue growth was largely driven by a 42% surge in transactional banking and trading income.
“We continue to see increased customer confidence in Absa evidenced by 30% year-on-year increase in customer banking transactions and increased utilization of trade instruments, which grew by 36% year on year. With the resurgence of economic activity, we saw an increased customer uptake of our working capital and trade solutions to meet their business finance need,” said Mr. Kalifungwa.
The growth in deposits is attributed to an increase in the active customer base as a result of new-to-bank acquisitions and increased digital and alternate channel utilization.
The bank also realized a 12.9% growth in customer loans closing 2023 at UGX1.76 trillion, reflecting a 10.6% three-year cumulative average growth rate.
Michael Segwaya, Executive Director and CFO, Absa Bank Uganda said that bank’s performance is underpinned by the 5.2% growth in the economy in 2023 amid various macro-economic challenges including underlying inflationary pressures.
“We disbursed more loans mainly driven by an increased demand by customers for working capital requirements and our trade loans and overdraft utilization yielded 19% and 29% growth respectively. This is in line with our drive to support business growth by extending financing to key sectors including trade, manufacturing, agriculture, SME’s, ultimately contributing to economic growth,” said Segwaya.
Segwaya said the bank remained strong and steadfast “having strengthened our ability to operate in a constantly evolving local, regional and global environment, and to leverage this strength to make a positive difference in the lives of our customers, colleagues and the nation of Uganda as a whole”
He also mentioned that an enhanced customer value proposition resulted in strong growth in personal mortgages, credit card and asset finance uptake, which registered a record growth of 40%, 38% and 188%, respectively.
“Impairment closed at UGX 2.4Bn driven by improved credit monitoring and closer relationships with our customers. At Absa, we believe that our people and customer experience are critical enablers for business growth and as a result, our continued investment in staff welfare and development coupled with investments in digital enhancements led to a 23 percent rise in operating expenses,” Mumba added.
Delivering, and protecting returns, developing people, and ensuring a sustainable risk and control environment is central to the bank’s strategy.
“We are financially stable and growing. With a total equity growth of 14.6%, we are well capitalized to support economic expansion across key strategic sectors. Looking to 2024, we anticipate continued growth in the economy driven by increased investment in the oil and gas sector as well as an expansion in regional trade. As the economy grows, we are well poised to support this growth,” Mumba said.
