Stanbic, Uganda’s leading Bank, has released its full year financial results for 2018 with the bank registering solid growth.
Announcing the results at a press briefing on Thursday, at Kampala Serena Hotel, Patrick Mweheire the Stanbic Bank Chief Executive said: “We maintained solid growth in our profitability registering a profit after tax of Shs 215 billion up by 7 per cent from Shs 200 billion in 2017. This was largely driven by growth in our revenues, efficiencies under cost control and credit risk.”
Analysing the bank performance, Mweheire said 2018 had some challenges in the first half of the year characterised by low economic activity and low aggregate demand.
“We made a deliberate decision to match our Prime Lending Rates with the Central Bank Rate as it lowered. Therefore, we expected that there would be some pressure on our revenue side and as such we were deliberate about optimising our cost structure to ensure that we could still deliver good returns despite these revenue pressures,” he said.
He continued: “As a sign of confidence in the bank’s resilience, our customer deposits maintained strong growth of8 per cent to Shs 3.9 trillion from Shs 3.6 trillion registered in 2017. This led to a strong market share position of approximately 20 per cent.”
He pointed out that; the bank heavily invested in a customer centric model of operation. This enabled the bank to create innovative solutions and channels which have helped improve convenience for the customer while bringing down transaction costs.
“Digital channels have enabled us to see overall transaction growth of over 25% year on year basis with transactions on these alternate channels growing by over 40 per cent. As at end of 2018, approximately 80 per cent of our transactions were being done on our alternative digital channels,” he explained.
Commenting on the bank’s key performance indicators, Sam Mwogeza, the Stanbic Chief Financial Officer revealed that the bank reported improvement across all key financial metrics.
“We recorded a double digit growth in our loan book which recorded an annual growth of 18 per cent in 2018 growing to Shs 2.5 trillion from Shs 2.1 trillion in 2017. This resulted in a market share gain for the bank of 20 per cent from 19 per cent at the start of the year. This was driven by private sector credit growth around sectors like manufacturing, trade, building and construction and household lending. We were very particular with the sectors that we lent money to and we availed more credit to those sectors that we saw a higher growth rate rebounding. As such, that enabled us to be more proactive in seeing the switch in borrowing appetite and requirements from clients in those sectors as they began to pick up momentum,” he said.
The bank earnings per share also went up to Shs 4.2 in 2018 up from Shs 3.9 the previous year.
“Our Shareholders will be pleased to hear that based on the banks strong performance the dividend increased by 8 per cent to Shs 97.5billion with the dividend pay-out ratio increasing to 45 per cent supported by strong profitability and capital position,” he said.