Absa Uganda basks in shs146bn profit after tax
Absa Bank Uganda has announced a profit after tax of Shs146 billion for the period ending December 2023.
According to the financial results released on Tuesday indicated that the bank’s customer deposits also grew by 16.3% to shs2.9 trillion while amount of loans extended also grew by 12.9%.
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The financial results also indicated that at the end of December 2023, Absa Bank Uganda’s revenue grew by 15.6% to shs474billion.
The growth in revenue was largely driven by a 42% growth in transactional banking and trading income.
“We continue to see increased customer confidence in Absa evidenced by 30% year on year increase in customer banking transactions and increased utilization of trade instruments, which grew by 36% year on year. With the resurgence of economic activity, we saw an increased customer uptake of our working capital and trade solutions to meet their business finance need,” said Mumba Kalifungwa, Managing Director, Absa Bank Uganda.
The bank realized a 12.9% growth in customer loans closing 2023 at shs1.76 trillion, reflecting a 10.6% three-year cumulative average growth rate.
“This performance is underpinned by the 5.2% growth in the economy in 2023 amid various macro-economic challenges including underlying inflationary pressures. We disbursed more loans mainly driven by an increased demand by customers for working capital requirements and our trade loans and overdraft utilization yielded 19% and 29% growth respectively. This is in line with our drive to support business growth by extending financing to key sectors including trade, manufacturing, agriculture, SME’s, ultimately contributing to economic growth,” said Michael Ssegwaya, Executive Director and CFO, Absa Bank Uganda.
He also mentioned that an enhanced customer value proposition resulted in strong growth in personal mortgages, credit card and asset finance uptake, which registered a record growth of 40%, 38% and 188%, respectively.
Customer deposits grew by 16.3% to shs2.9 trillion notably driven by an increase in the active customer base as a result of new to bank acquisitions and increased digital and alternate channel utilisation.
“Impairment closed at shs2.4 billion driven by improved credit monitoring and closer relationships with our customers. At Absa, we believe that our people and customer experience are critical enablers for business growth and as a result, our continued investment in staff welfare and development coupled with investments in digital enhancements led to a 23 percent rise in operating expenses,” Mumba added.
Delivering, and protecting returns, developing people, and ensuring a sustainable risk and control environment is central to the bank’s strategy.
“We are financially stable and growing. With a total equity growth of 14.6%, we are well capitalized to support economic expansion across key strategic sectors. Looking to 2024, we anticipate continued growth in the economy driven by increased investment in the oil and gas sector as well as an expansion in regional trade. As the economy grows, we are well poised to support this growth,” Mumba said.
