Absa Bank Uganda has released its financial results for the year ended December 2022 in which it indicated that its profits grew by 28.9% .
The results released on Tuesday indicated that the bank’s profit after tax grew to shs141 billion attributed to a 12.5% growth in revenue by shs46 billion.
“Despite an uncertain operating environment, I am pleased to report that it was a year of growth for us at Absa. This performance is underpinned by the resilience of Uganda’s economy which grew by 4.6% in the face of a global economic downturn and tighter financial conditions. We anchored our focus on supporting our customers to navigate these tough times,” said Mumba Kalifungwa, the Managing Director, Absa Bank Uganda.
The bank however reported a significant drop in impairment, 94% driven by sustained business recovery and the improved post pandemic economic environment.
“We are pleased to report that impairment reduced substantially, resulting from an improvement in the construct of our loan book. It is a further reflection of our efforts to help customers regain and improve their ability to meet their credit obligations. Through sustained customer engagement, providing the necessary business and financial advisory, we were able to support our customers businesses, most of which were in distress, to recover from the lockdown impact,” Kalifungwa added.
The bank also reported a 19.8% growth in customer loans to shs1.6 trillion a state of affairs attributed mainly to increased demand for credit following the resurgence of the economy from the effects of COVID-19.
“Despite the macro-economic challenges affecting the business and operating environment, we supported the economy’s growth trajectory financing key sectors including agriculture, trade, construction and real estate and manufacturing. Our total lending to the agriculture sector currently stands at shs158 billion, reflecting a growth of 40% from 2021, trade at UGX306 billion growing by 25% from 2021 and manufacturing at shs196 billion growing by 14% from the previous year.”
The bank also realized a marginal growth in customer deposits to shs2.5 trillion attributed to an increase in the active customer base as a result of new to bank acquisitions and reactivation of inactive accounts.
Additionally, there were increased customer engagements due to the capabilities built by the bank across its various alternate channels.
“Our total assets grew by 5.6% to shs4.23 trillion maintaining a 7.3% cumulative annual growth rate. This growth is largely attributable to a strong increase in customer loans as we continue to support our individual, SME and commercial customers in their personal and business endeavors,” Michael Segwaya, Executive Director and Chief Financial Officer said.
Going into 2023, officials say Absa’s strategic priorities remain centered around improving customer and digital experience, delivering, and protecting returns, developing people, and ensuring a sustainable control environment.
“A 12% increase in total equity denotes our ability to finance economic expansion across all strategic sectors. We are very well capitalized, financially stable, solid, and growing. Over the near and medium term, we project that economic growth will be supported by developments in the oil sector and a rebound in agricultural output on improved weather conditions. We are already seeing a reduction in inflation which signals better days head. We intend to put sustainability at the centre of everything we do to deliver shared value within our community,” the Absa Uganda Managing Director, Mumba Kalifungwa said.