Absa bank flies high in 2019 as revenues grow by 19.4%

Absa Bank Uganda has announced a 19.4% growth in revenue to shs 405 billion, up from shs339 billion in 2018 in the results released.

The bank that last year rebranded from Barclays indicated that its net profits jumped from shs68 billion shs78 billion with a return on equity of 16.9%.

“We saw steady growth in the bank’s balance sheet and income in 2019. We continue to drive cost efficiencies and manage our portfolio quality as a base for strong earnings. The bank earned more revenue by strategically diversifying income streams and developing a good asset mix which delivered a strong competitive advantage,” said the Absa Bank Uganda Managing Director, Mumba Kalifungwa.

The bank realized a 13% growth in customer assets with lending to customers increasing to shs1.334 trillion in 2019 from shs 1.178 trillion in 2018.

“We were able to advance more credit to our customers by implementing a customer-focused strategy that gave us flexibility to develop tailored financial solutions to help our customers meet their growth ambitions. Growth in customer lending was driven by increased customer engagement, relationship management and a strong focus on lending to the SME and trade sectors, which are significant drivers of the economy,” Kalifungwa stated.

According to the bank, they earned a lot from loans and lending to government among other items that brought in a lot of money in the year 2019.

The bank also announced that customer deposits grew by 22% to shs2.2 trillion in 2019 and according to the Managing Director, this can be attributed to increased customer confidence, positive reception of the brand and increased investment in innovative and revamped banking channels.

“Our ambition is to become a digitally-led bank that is centred around the ever-changing needs of customers. Today’s customer demands even greater convenience as they look to reduce the amount of time spent banking and therefore our customers should expect more digital innovation from us that will enhance their banking experience. Our investment in digital channels has already started yielding positive results,” he said.

After completing the transition from Barclays to Absa, the bank embarked on an investment in digital channels including as enhanced internet banking App, agency banking and the first fully digital branch in the market.

“Our growth in costs was attributed to the significant investment in the bank’s highly successful rebranding and separation from Barclays PLC. This was essential to ensure that the bank maintained its customer base by ensuring a smooth and stable transition. This investment paid off and is reflected by the positive reception of the Absa brand in the market,” Kalifungwa said.

He added that the bank’s total regulatory capital ratio grew to 22%, remaining well above the regulatory requirements.

“We are very well capitalized for the future and continue to have the ability to support our customer’s growth ambitions. We remain a significant player in the banking and financial services sector and a key contributor to Uganda’s economy.”