• Stanbic Bank Uganda
  • XUGA:SBU KAMPALA/Uganda
  • 27.00 UGX
  • 0.00 0.00%
  • As of 2017/05/26
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  • About the Company
  • Stanbic Bank Uganda is part of Africa's leading banking and financial services group Standard Bank. Stanbic Bank is the largest financial institution in Uganda with over 71 branches across the country
  • Stanbic Uganda – Business Profile

    Stanbic Bank Uganda is part of Africa’s leading banking and financial services group Standard Bank.

    The Bank was founded in Uganda as the National Bank of India in 1906, which after several name changes became Grindlays Bank. When the Standard Bank Group bought the Grindlays network in Africa it also in October 1993, re-established a presence in Uganda as Stanbic Bank.

    In February 2002, Standard Bank Group through its investment arm bought 90% of shares in Uganda Commercial Bank, a largely retail government-owned bank that operated a countrywide network consisting of 67 branches. The rest of the 10% shares remained under Uganda government ownership.

    The recent Stanbic Bank Initial Public Offer was in line with the objectives of the Government’s divestiture programme, that seeks to remove state participation in the ownership of a variety of companies. The Initial Public Offer of Ug Shs 1,023,773 394 shares amounting to 20% of the shares of the company was as a result of an agreement between the government of Uganda and the Standard Bank Group of South Africa.

    The objectives of the offer and listing were to enable the Ugandan public to participate in the equity of Stanbic Bank and to encourage wider ownership of shares in general. It also provided individuals, institutional investors and other interested parties with an opportunity to participate in the equity of Stanbic Bank and to provide a market for the shareholders to realise their investment in Stanbic Bank. The response was phenomenal with 37,449 applications for 3 billion shares totaling U Shs 211 billion hence a 200% oversubscription.

    Stanbic Bank shares are now traded on the Uganda Stock Exchange.

    Stanbic operates 71 points of representation and a growing ATM network currently numbering 111. The Bank is located all over Uganda with Stanbic Bank’s head office in Kampala from where its business and support functions operate.

    Stanbic Bank is the largest financial institution in Uganda licensed under the Financial Institutions’ Act, 2004 and is listed on the Uganda Securities Exchange Limited effective January, 25 2007.

     

    Website

    www.stanbic.co.ug

    Address

    Stanbic Bank Uganda

    17 Hannington Road

    PO Box 7131

    Kampala

    Uganda

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After a low of $149m in net revenues in 2013, net revenues have grown 7.7% this year slower than last year when they grew at 10%. With this growth they have not recovered to their 5-year peak of £170m
Revenue per year in US $ The higher, the better.
Profits have increased for the last 3 years $47.3m but have not recovered to peak of $51.8m in 2012
Profits per year in US $ The higher, the better.
Profit margins have remained below 30% despite increase in profits indicating a struggle to keep control of costs.
Profit Margin compared to competitors The higher, the better.
Stanbic has maintained return on assets above 3% which is double the global average but is still below the local average.
Management of Assets compared to competitors The higher, the better.
Costs as a percentage of revenue is at 62.82% significantly lower than its peak of 69.85% in 2013. This cost percentage is a lot better than the local average but worse than African average.
Management of Costs compared to competitors The lower, the better.
Cash generation by Stanbic has halved since 2012 but better than 2013 when cash generation was negative due to increased losses in government securities.
Cash Generation compared to competitors The higher, the better.
Assets are currently 90% financed by banks, this may seem high but is similar for both local and African banks. This dependence on debt has reduced slightly over the last few years
Level of Debt compared to competitors The lower, the better.
Stanbic Bank can comfortably cover its immediate debts similar to all local banks. The margin between the liquid assets and current liabilities for Stanbic is lower than other local banks but this has been driven by a drastic increase in customer deposits.
Ability to pay debt compared to competitors The higher, the better.
The available cash (working capital) has increased by 70% over the last 5 years from $112m to $191m. This shows that Stanbic has become more efficient and healthier. This enables that Stanbic to invest more money within the business.
Liquidity/Cash Availability compared to competitors The higher, the better.
Revenues have grown slower than other local banks but the growth in profits has been faster than its local peers. In 2013, Stanbic experienced a 12% drop in profits and 33% drop in revenues, similar to other local banks - this drop in earnings was due to slowdown following the 2011 Ugandan election.
Revenue Growth compared to competitors The higher, the better.
Profit Growth compared to competitors The higher, the better.
Stanbic continues to have pay out the highest level of dividends in Uganda and Africa. Currently Stanbic pays out 3% of its share price but this is half of what it paid out the previous year. This is different from other local banks where dividends have gone back.
Despite Stanbic having high levels of dividend, this drop in dividend yield raises concern about how long this will be sustained.
Return on Equity compared to competitors The higher, the better.
Dividend Yield compared to competitors The higher, the better.
Stanbic Uganda has increased the investment in the business since 2011, and is doing it at the highsest levels both locally and in Africa.
Level of Investment per year in US $ The higher, the better.
Investment Ratio compared to competitors The higher, the better.

A law capping interest rates continues to pile pressure on Kenyan banks, with at least three banks posting a drop in earnings in the first quarter of this year.

NIC Bank, Stanbic Bank and Kenya Commercial Bank (KCB) posted 3.9 percent, 9.3 percent and 1.9 percent decline in profit, with the performance attributed to the capping of loan rates.

Kenya introduced the law to cap interest rates in the third quarter of 2016, with the move aimed at deepening access to credit especially among small borrowers.

The rates were capped at 4 percent above the Central Bank Rate which currently stands at 10 percent. Banks, therefore, are currently charging borrowers a maximum of 14 percent, down from between 18 and 28 percent.

The result, however, is that commercial banks are reeling from the effects of the reduced earnings as the law leads to unintended outcomes, including layoffs and slow credit growth.

Financial results of the three banks released last week indicated the squeeze the banks are facing following the implementation of the law. KCB posted a 1.9 decline in core earnings per share to 14.4 billion U.S. dollars from 15 billion dollars.

Stanbic and NIC Bank have kicked off what is likely to be a “new normal” for banking industry, underpinned by reduced profitability.

The industry is grappling with a growing rate of loan defaults which started in 2015, amid interest controls to protect borrowers from high loan charges and tight regulations to enhance sound corporate governance.

Stanbic Bank on Friday became the second medium-sized lender to report a drop in net profit for three months through March 31, largely on rising bad debt and reduced interest earnings.

Stanbic’s profit after taxation slowed by 9.24 per cent to Sh1.08 billion from Sh1.19 billion it posted 12 months earlier.

Net interest earnings contracted by 12.23 per cent to Sh2.44 billion, the country’s eighth largest lender by market share said in a financial statement. The bank, however, advanced Sh11.81 billion, or 11.40 per cent, more loans to hit Sh115.37 billion in the first quarter of the year compared to the year before.

Non-performing loans over the period jumped by nearly a third, rising 29.73 per cent to Sh5.76 billion resulting in a 32.80 per cent rise in provisions to Sh1.66 billion. 

STANDARD Bank Group subsidiary, Stanbic has been named visa card champion for 2016 after nurturing a steady growth of its market share in the past year.

The bank claimed a market share of over 30 percent in the visa acquiring category resulting in their being named and awarded Visa Card Champion for 2016 by Visa International.

This comes on the back of the bank launching Point of Sale (POS) machines in the market in the last quarter of 2014 backed by innovative consumer campaigns to drive usage and ensure seamless convenience for customers.

The financial institution says it has made great strides in becoming a key player in the card acquiring market in just two years of market representation. Leaked Video Will Ruin Obama – Watch His Guilty Face At 0:33 Exclusive new video proves Obama’s presidency was totally invalid. See why here. pro.advanced-health.org

Jacqueline Malaba, the business development director for Visa International explained that two indicators were evaluated for them to come to the decision on choosing the visa card champion. “We considered card growth and payment volume growth in this category and Stanbic Bank was the market leader in both categories surpassing expected average growth rates. This made the Stanbic portfolio the best performing in the market,” she said.

Patson Mahatchi, the bank’s head of distribution and customer channels, said that the growth was testimony to the financial services institution’s quest to adhere to its core values.

Tanzania has asked Kenya to extradite former Stanbic Bank CEO Bashir Awale to face charges in the $600 million government bond bribery scandal, it has emerged.

Attorney General George Masaju has reportedly sought help from his Kenyan counterpart, Mr Githu Muigai, to bring back Mr Awale for questioning over the bribery scandal that rocked the final years of Jakaya President Kikwete’s government.

If extradited, Mr Awale will likely be joined in the case that has seen former Tanzania Revenue Authority (TRA) boss Harry Kitilya and two other prominent individuals charged and remanded since April, last year. Mr Kitilya, former Miss Tanzania Shose Sinare and Mr Sioi Sumari, all former officials of Stanbic bank, are languishing in jail awaiting hearing of their application for bail.

The three have been charged with money laundering, forgery, abuse of position, corruption, obtaining advantage and transfer of proceeds.

Yesterday, Kenyan media reported that President John Magufuli’s government wants Mr Awale to answer questions over the transaction of the deal in which he is said to have played a key role.

Kenya’s top 10 banks registered a 10.8 per cent growth in net earnings to Sh93.81 billion for the financial year ended December 31, 2016.

The growth was despite four of the lenders – Equity Bank, Barclays Bank of Kenya (BBK), Stanbic Bank and NIC Bank – registering a drop in profits after tax.

Kenya Commercial Bank (KCB), Equity Bank and Co-operative Bank remained the top three most profitable lenders respectively and also the only ones with double-digit-billions profits.

However, for the first time in over 10 years, Equity recorded a drop (5.9 per cent) in profits. Despite KCB Group recording a 0.5 per cent growth in profits, the slowest pace in seven years, KCB Bank saw its after-tax profit soar by 19.9 per cent to Sh19.78 billion.

At the same time, Co-operative Bank registered a 24.6 per cent growth in profit to Sh13.05 billion.

For the sixth consecutive year Stanbic Bank Uganda has won the best ‘ Primary Dealer Award ‘ beating off stiff competition from six other commercial banks.

The accolade is given on an annual basis to the financial institution that has excelled in executing its primary dealer mandate and is the culmination of a very rigorous annual appraisal process by Bank of Uganda.

Presenting the award at a ceremony held at the Central Bank of Uganda , Governor Prof. Emmanuel Mutebile acknowledged the key role Stanbic had played in the market especially for its participation in the primary auctions, market making capabilities, consistent pricing as well as timely market intelligence.

He also recognized the role played by all the other banks who are part of the primary dealer system. “I applaud the contribution of all the primary dealer banks towards the development of the government securities market and by extension the financial markets in Uganda.” Mutebile said in a press statement.

Accepting the award on behalf of Stanbic Bank, the Board Chairman Mr. Japheth Katto thanked the entire bank and in particular the global markets team for their sacrifice and dedication.

The Uganda Securities Exchange has rolled out an online trading window — Easy Portal — that offers investors opportunities for faster transactions at no fee to spur trading activity.

But a scarcity of equity listings and limited investor participation could work against the initiative.

Easy Portal directly helps investors to trade shares without hiring stockbrokers.

Stocks traded on the USE are charged a commission of 2.1 per cent that is shared between the stockbrokers, the bourse, the Capital Markets Authority and the Investor Compensation Fund, among other agencies.

To trade, investors will log in their Central Depository System account numbers, their national identification card numbers and view the prevailing stock prices before choosing trading options.

The trading window also contains an initial public offering (IPO) application, a critical aid for handling investor documents usually submitted during public equity offerings.Investor statements issued by this facility will be saved for a maximum of six years, the bourse said. However, investment costs tied to this trading portal could not be confirmed by press time.

Low IPO growth

IPO growth usually attracts more investors to stockmarkets and in turn, boosts trading activity as new investors seek to exploit fresh opportunities available at the bourse.

The low IPO growth at the USE can be traced back to 2012. While DFCU Ltd and New Vision Ltd were listed in and also recorded oversubscription of about 50 per cent, Stanbic Bank Uganda was listed in 2007 following a successful IPO that was oversubscribed three times, according to industry data.

Nevertheless, the bourse is exploring IPO opportunities among some government-owned financial institutions that possess reasonable growth forecasts.

However, sluggish growth evidenced in IPO subscriptions in recent times could impact investor uptake on the Easy Portal window, observers say.

 

The integration of capital markets in East Africa faces a severe test with the expected listing of 86 telcos and mining companies at the Dar es salaam Stock Exchange (DSE), where only Tanzanians will be allowed to participate.

The initial public offerings (IPOs) buck the recent trend where citizens of the five EAC member states – Burundi, Kenya, Rwanda, Tanzania and Uganda – were allowed to buy shares in the primary sale.

This helped investors to acquire stakes in Stanbic Uganda, Crystal Telecoms in Rwanda and listings in the Growth and Enterprise Market (Gems) at the Nairobi Securities Exchange.

Vodacom Tanzania is set to sell 560 million shares to the public this week, worth Tsh476 billion ($208.5 million) after receiving regulatory approvals but non-Tanzanians can only enter the counter when the shares start trading at the DSE.

“The move by Tanzania to lock out investors from East African countries will slow down the integration of the regional capital markets,” said David K Gathaara, managing director of Baraka Capital, a brokerage firm operating in Rwanda and Uganda.

Integration protocols

“Tanzania has a right to protect local investors in the primary market but, in the spirit of the East African integration protocols, it should have allowed other citizens from the region to participate in the IPO.”

IPSL Chief Executive Officer, Jennifer Theuri says they hope to raise the number of banks using Pesalink in the next few weeks So far, 22 commercial banks are part of the network allowing customers to move money across banks through the app. The banks include; I&M Bank Kenya, CBA, First Community Bank, Paramount Bank, Jamii Bora Bank, ABC Bank, Bank of Africa, Spire Bank and Equity Bank.

Other Banks are; Cooperative Bank, Barclays Bank of Kenya, Credit Bank Ltd, DTB, Guardian Bank, Middle East Bank, NIC Bank, Standard Chartered Bank, Prime Bank, Victoria Bank, Gulf African Bank, Consolidated Bank and Stanbic Bank.

The service affords bank customers registered on the platform to make real-time interbank payments, around the clock, without having to go through any intermediaries on any of the five bank channels including; Mobile devices, Internet, Automated Teller Machines (ATM), Bank Branches or Commercial Bank Agency outlets.

The platform allows the registered users to transact as low as Sh10 to as much as Sh999, 999 across the banking system at a low cost comparatively.

Founded under the Central Bank of Kenya’s National Payments System (NPS) guidelines, the platform has been developed to provide interoperability and related FinTech solutions for banks.

Stanbic Bank Uganda’s 2016 pretax profit rose 24.9 percent, helped by business diversification that spurred a increase in non-interest revenue, the east African nation’s largest lender by assets said on Wednesday.

The bank, part of South Africa’s Standard Bank and listed on the Uganda Stock Exchange, said pre-tax profit rose to 253.9 billion Ugandan shillings ($70.33 million) in 2016, up from 203.3 billion the previous year.

The bank said a diversified business model had helped them absorb economic shocks and underpin growth.

“This is the major reason why our revenues and earnings have grown,” the bank said in results published in local media adding that non-performing loans in the industry caused by weak economic activity. Uganda’s banking sector non-performing loans stood at 10.5 percent in December, up from 7.7 percent in September, according to central bank data.

The results showed the bank’s income from trading in foreign exchange, government debt and other trading activities climbed 28 percent last year from 2015.

A dividend of 1.172 shillings has been recommended for the year, the bank said. ($1 = 3,610.0000 Ugandan shillings)