Absa Grows Assets to Shs 3.4 Trillion
Absa Bank Uganda and Standard Chartered bank have announced a jump in profits for the year 2019, completing the set of the top five most profitable banks in the country.
Stanbic, Centenary, Standard Chartered, Absa and Dfcu bank respectively make up the top five most profitable banks in the country, with each bank’s net profits above at least Shs 70 billion in 2019 – in what looks like one of the best years for the bankers. Absa, which published its results today shows its net profits jumped to Shs 78 billion in 2019 up from Shs 68 billion in 2019.
The bank, which is reporting for the first time as Absa brand after it completed transition from Barclays last November, also grew its assets to Shs 3.4 trillion from Shs 2.8 trillion in 2018. This is a testimony that the transition period, which started in 2016 as Barclays PLC sold its interest in Barclays Africa has not had any negative impact on the bank’s performance.
Other indicators that show strong growth like customer deposits, money earned on loans, and from lending to the government are at an all-time high for the bank. Costs for the bank still grew which means it is still expensive to do business in the country.
Mumba Kalifungwa, the managing director of Absa Uganda, said in a statement; “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.”
He added that the bank earned more revenue by strategically diversifying income streams and developing a good asset mix which delivered a strong competitive advantage.
Meanwhile, Standard Chartered Bank also turned in envious numbers with its net profits reaching 124 billion Shillings in 2019 up from 96 billion Shillings in 2018, making it the third most profitable bank after Stanbic and Centenary. Stanchart assets also reached 3.2 trillion from 2.9 trillion Shillings in 2018.
Albert Saltson, the Managing Director of Standard Chartered Uganda, “said they reshaped our business by implementing our refreshed strategic priorities pushing up earnings.” He added that they managed to have “more than 86 per cent of client interactions with the bank now happening outside the branch” – a key effort to emphasize digital platforms.
For some banks, it has not been easy. KCB moved from a profit-making to loss-making. Cairo Bank International also reported losses. NC bank transitioned from loss-making to profit. Housing Finance Bank, Bank of India, Diamond Trust Bank and Bank of Africa remain strong performers, while Finance Trust, Pride Microfinance show steady growth. All banks are expected to publish their financial results by April 30.
In 2019, the economy is projected to have grown at 6 per cent, with the economic activity thought to have facilitated bank’s strong performance. On the other hand, 2020 is expected to be harder as businesses are bruised by the coronavirus crisis, which is likely to cut bank’s profits.