It has been a momentous 2019 marked by the entry of two commercial banks; opportunity bank and Afriland First Bank Uganda. Bankers cut a cake. PHOTOS: Jimmy Outa It was a night of glamour as all of Uganda’s 26 commercial banks gathered for the annual Uganda Bankers Association (UBA) dinner at the Mestil hotel to mark the unofficial close of the year.
It has been a momentous 2019 marked by the entry of two commercial banks; opportunity bank and Afriland First Bank Uganda.
During the dinner, Prof. Emmanuel Tumusiime-Mutebile, the governor Bank of Uganda applauded Absa on a smooth transition from Barclays. He said that the licensing of two additional banks shows that there great confidence in Uganda’s economic prospects. New Vision business journalist Samuel Sanya receives his award The governor applauded the banks on the application of the International Financial Reporting Standard 9; which has said has placed the industry on a solid footing. Analysis of the industry by summit consulting shows that the adoption of IFRS 9 as of January 2018 has led to a significant 39.4% year on year decline in Non-Performing Loans.
Prof. Mutebile noted that even though Uganda’s economy was ticking along well, with economic growth of about 6% and inflation below the 5% target, there are risks to growth from slowing global economic growth of about 3.2%. Mutebile and Kamuntu share a moment IFRS 9 has imposed stricter credit risk models that have been adopted by all banks which have seen provisioning at the start of the origination of the loan, pushing credit risk managers to become stingier in dishing out loans.
The report showed that Bank of Africa recorded the highest non- performing asset ratio of more than 10% in 2018, a figure that worsened by more than 90% year on year. The best bank in reducing NPLs was Bank of India.
The report showed that Stanbic bank had the highest return to equity of 22.5%. Mercantile Bank (20.89%), Equity Bank (20.38%), Baroda (19.61%), Citi (19.49%), Centenary (16.72%), Absa (15.82%), Standard Chartered (15.62%), Housing Finance Bank (14.51%) and Finance Trust (13.96%) completed the top ten. Bankers serve dinner The report shows that these banks relatively earned above the industrial average return on investment. These are the most sought-after banks as they utilize equity efficiently. At the end of June 2017, industry assets were sh24.8 trillion.
Mustapha Mugisa, Summit Consulting Ltd CEO noted that in Uganda, the top […]
