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Innovative lending schemes earn Stanbic Uganda Shs 412 billion in Profit After Tax

Stanbic Uganda, a franchise of the Standard Bank Group—Africa’s largest commercial lender by assets, has announced a profit after tax of UGX 412 billion for the period ending December 2023 representing 15.2 percent growth from UGX 357 billion earned the previous year.

Trading on the Uganda Securities Exchange as Stanbic Uganda Holdings Limited (SUHL), it runs five business units including Stanbic Bank—the anchor subsidiary, Stanbic Properties (in real estate), SBG Securities (in stock brokerage), Stanbic Business Incubator (SME training), as well as FlyHub (in technology solutions) collectively employing nearly 2000 people.

SUHL Chief Executive Francis Karuhanga attributed the strong growth of the franchise to sustained exceptional performance by its anchor business—Stanbic Bank across its retail, business, and investment banking portfolios.

“Despite the operating challenge in 2023, our business demonstrated resilience and sustained double digit growth with Return on Equity of 22.5 percent and shareholder returns increasing to UShs 1.9 trillion in 2023 from UShs 1.78 trillion in 2022. As a result, we shall increase our dividend pay-out to 68 percent for the FY 2023, from 66 percent the previous year—subject to regulatory approvals,” said Karuhanga.

Anne Juuko, the Stanbic Bank Uganda given the prevalent high interest rates in 2023, the bank had to devise innovative approaches, as we have done over the last four years—to ease the burden of borrowing on clients especially smallholder farmers, women owned businesses, civil servants, and government of Uganda which enabled them to access credit under friendly and flexible terms.

“For instance in 2023, we boldly extended the repayment tenure of existing personal loans to up to seven years, from five and created the much needed legroom for top-up lending which enabled access to money to finance pressing needs such as school, medical and household expenses. As a result, our consumer loan book grew by UShs 369 billion in 2023 from UShs 309 billion the previous year—2022,” said Juuko.

Driving Uganda’s growth

In 2023, Stanbic disbursed over USsh 160 billion in affordable loans to farmers, women owned businesses, through the SACCO lending and capacity building programme, and Stanbic4Her.

Through Stanbic4Her alone, loans worth nearly UShs. 80 billion were disbursed at 15.5% while over 50, 000 women have undergone capacity building trainings. Meanwhile, over 2 million members attached to 6000 SACCOs accessed affordable credit at 10 percent to the tune of Ushs. 85 billion indirectly impacting 10 million Ugandans.

FlexiPay which is Stanbic Uganda’s response to the rising popularity of digital wallets in the industry saw good growth in users with wallets increasing from 390, 000 to over 840, 000 generating a transaction value of Ushs. 464 billion in 2023.

Stanbic Uganda’s revenues increased to Ushs. 1.19 trilion in 2023 with operating costs accounting for Ushs 584 billion. Of the expenses, Stanbic says Ushs. 169 billion was paid to local suppliers, more than the Ushs. 137 billion paid the previous year. “We remain committed to supporting economic growth by giving business to local suppliers. Out of the 672 registered suppliers, at least 520 of them are local vendors; this has increased from 394 the previous year,” said Karuhanga.

Karuhanga said, in terms of paying taxes, Karuhanga said Stanbic paid Ushs 354 billion having increased from Ushs. 272 billion. “We are proud tobe among the country’s top ten largest taxpayers. The banking subsidiary alone paid Ushs. 314 billion in taxes,” he said.

Through the Stanbic Business Incubator, over 900 local businesses received capacity building training to enhance their efficiency in management, market competitiveness, bidding processes, tax management and recordkeeping. The Stanbic Business Incubator was also honoured by the Uganda National Oil Company as the best local content partner—in appreciation of its contribution to supporting local enterprises to participate in the oil and gas economy.

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