Location:17 Hannington Road, Kampala, Uganda Postal Address: Po Box 7131, Kampala, Uganda  Mr Sam Mwogeza, the CFO, Stanbic Bank: Profit rises to Shs191b despite sluggish loan activity Uganda’s largest bank continued to manage risk but was still able to pull off 21 per cent rise in after-tax profit.Financial results released indicate that the after-tax profit rose to Shs191b from Shs151b due to a rise in income from three main sources.In a year the banking sector was expected to struggle due to high lending rates and lower than expected growth, Stanbic Bank Uganda was still able to generate more income.“A mix of factors supporting growth: Investment in higher yielding AFS securities, higher yields from the loans and advances and good returns from investment of excess liquidity into the interbank market,” Mr Sam Mwogeza, the chief finance officer, Stanbic Bank Uganda, told reporters at a media briefing at the Kampala Serena Hotel.Read more ▪ Stanbic Bank Uganda acquires $55m loan facility from Dubai Stanbic Bank Uganda Limited, (Stanbic Uganda) a subsidiary of Standard Bank Group Limited (Standard Bank Group), signed a US$ 55 Million two year term loan facility today in Dubai. Emirates NBD Capital Limited was the Sole Co-ordinator and Bookrunner of the financing.Al Ahli Bank of Kuwait K.S.C.P, Bank of Baroda, SBM Bank (Mauritius) Ltd and The Commercial Bank (Q.S.C.) joined the transaction as Mandated Lead Arrangers. The financing, which will be used for general corporate purposes, including, but not limited to finance exclusively in the specific sectors of energy, agriculture, mining and quarrying, manufacturing, trade, transport and telecommunications, infrastructure, electricity and water, construction and real estate, was oversubscribed from the initial launch amount of US$ 40 Million. The facility pays 275 basis points margin over LIBOR.Dr. Rassem Zok, CEO MENA, Standard Bank of South Africa Limited (DIFC Branch), stated that “the fact that Middle Eastern and International banks have returned to participate in this re‑issue for Stanbic Uganda confirms both the positive outlook for the Ugandan economy and confidence in our Standard Bank Group’s leadership in corporate and investment banking in Sub‑Sahara Africa”. Read more ▪ 210 entrepreneurs graduate from Stanbic Bank mentorship programme 210 Small and Medium Enterprise (SMEs) owners have Wednesday graduated from a one year business and mentorship programme supported by Stanbic Bank in partnership with Enterprise Uganda.The program which was initiated to improve the capacity of Small businesses to become more self-sustaining by acquiring specialized skills on how to handle financial and administrative management.The Entrepreneurs were taken trained in different pillars of business including talent management, Team building, Finance and capital, Marketing and customer care among others.The training was also aimed at helping SME owners identify profitable investment opportunities for future growth.During the graduation ceremony, Kevin Wingfield, Head of Personal and Business Banking at Stanbic Bank noted that “SME’s from the back bone of our economy, constitute the bulk of the private sector, are one of the largest employers and generate a considerable amount of tax revenue.”“The challenge however, is that the majority of business owners in these companies have never been formally trained to run their companies professionally , as a result many struggle over time and collapse after a few years,” he added. Read more ▪ Stanbic Bank posts shs 107bn profit Stanbic Bank Uganda has posted a significant growth in its total assets which grew by 17 percent to Ugshs4.5Bn according to the bank’s half year performance for the financial year.The report further indicates a 28 percent year on year revenue growth from UgShs. 261Bn to UgShs. 334Bn.While releasing the results for 2016’s first half , Stanbic Bank CEO Patrick Mweheire said; “We are very pleased with our performance and the resilience demonstrated by our diverse business inthe first half of the year. Our diversified business model enabled us achieve these commendable results.”In terms of net profits, Stanbic posted a 57 percent growth supplemented by an increase in deposits from UgShs. 2,319Bn to UgShs. 2,838Bn . Mweheire attributed this to increased confidence among the bank’s clientele coupled with good riskmanagement. The bank’s market share also grew by 18% maintaining its lead in the financial sector.So far, Stanbic Bank has the third least lending rate at 23% behind Citi Bank (20%) and Tropical Bank (21%) which Mweheire said will continue on a downward trend reflective of the Central Bank rate. The Central Bank lending rate reduced by one percentage point from 15%. Read more ▪ Stanbic MD Mr Patrick Mweheire: 'Infrastructure projects too expensive for local banks' As Uganda enters into a phase where private money is being sought to finance infrastructure projects such as the $1b (Shs3.3 trillion) Kampala-Jinja Expressway, banks are expected to play a role.However, such ambitions have been played down by the country's largest bank - Stanbic. Mr Patrick Mweheire, the bank's managing director, said the 25 commercial banks in Uganda combined can only raise up to $200m (Shs664b) for a single project."Banks cannot do everything. The expectation that banking can fund all infrastructure projects in Uganda is rather misguided," Mr Mweheire told technocrats, regulators, and construction and insurance company managers at a symposium on power and infrastructure projects. Read more ▪ Stanbic to spend Shs200m on skilling business owners Stanbic Bank Uganda will spend about Shs200m on supporting the skilling of small and medium enterprise (SME) owners on how to operate sustainable and profitable enterprises, courtesy of the bank’s Business Mentorship Programme.The programme was launched by Stanbic Bank in partnership with Enterprise Uganda, as a training agency, among other things, provide mentorship and skills such as marketing, book keeping, accounting and customer service to 200 SMEs.The programme is directed at growing small businesses’ capacity to be self-sustaining through training them on money handling, identify profitable investments, marketing, leadership and governance to enable entrepreneurs generate enterprises with a clear direction and ability to grow.Speaking on the sidelines of a two-day business mentorship training in effective marketing and excellent customer care in Kampala recently, Stanbic Bank head corporate social investment Sharon Nassali Bbosa said the programme seeks to reduce the failure rate among Ugandan businesses. Read more ▪ Stanbic Uganda stock price at record low after lender cuts dividend payout A lower dividend package amid fresh recapitalisation pressures as well as concerns about stock overvaluation on the Ugandan bourse have driven Stanbic Bank's stock price to a record low. This is despite the lender posting good earnings, a circumstance that has left investors disgruntled.The bank slashed its full year dividend from Ush1.66 ($0.049) per share declared to Ush0.78 (US cents 0.023) per share, citing recapitalisation pressures attributed to the industry regulator.The Bank of Uganda has been forced to create additional capital rules for banks with large balance sheets, in line with the Basel three capital requirements -- a set of international banking capital and risk management benchmarks being enforced by central banks. Read more ▪ Businesses to benefit more from Stanbic loans Stanbic Bank Uganda Limited has announced it will be lending more to Small and Medium Enterprises (SMEs) this year to facilitate trading activities in Uganda’s business environment.The bank says the decision to focus on consumer lending is to continue growing its already profitable loan book, alongside other business interests, which helped the bank to register impressive profits. Stanbic realised a net profit of Shs150.8 billion, a growth of 12 per cent up from Shs135 billion. Releasing their financial results at Kampala Serena Hotel, the chief executive officer of the bank, Mr Patrick Mweheire, said: “We shall be lending more to the SMEs to facilitate trade because trade is a big driver and offers huge opportunities for us in consumer lending.”Mr Mweheire said there has been a pickup in credit growth due to faster growth in consumer goods particularly soft drinks, manufacturing and real estate on the commercial side which offers potential market for consumer lending. Read more ▪ Stanbic Bank: Investor confidence to drive investment bag for Uganda’s growth A new economic outlook report released by Stanbic Bank in partnership with the Chartered Financial Analysts Institute of East Africa has predicted a mixed bag of growth for Uganda.The report which was discussed by a cross section of experts and economists at a Stanbic Bank breakfast meeting held last week at the Kampala Serena Hotel, says Uganda will particularly grow at 5.4 per cent rate through 2016 and 5.7 per cent. The growth will be mainly driven by public investment in infrastructure. Stanbic Bank economist for East Africa, Mr Jibran Quresishi, said the growth in the real estate sector will particularly underpin Uganda’s GDP growth.He also said the robust security in the country will continue to drive investor confidence and drive more investments. Read more ▪ Patrick Mweheire, Stanbic Bank: Uganda's onerous tax regime hurting govt debt market Uganda's government debt market has attracted a diverse pool of investors in the past, but questions are now being raised about its competitiveness.The debt market is weighed down by the country's tax regime, and is dominated by large domestic investors, with few offshore players showing interest.Interest earned from Treasury bills and bonds for example, is subject to a withholding tax of 20 per cent, compared with Kenya's government securities, which attract a withholding tax of 15 per cent. This has discouraged offshore investors from entering the market, industry sources say.While Uganda's taxman applies withholding tax to gross yields earned from government securities, many emerging markets prefer using the net yield to determine withholding tax charges -- a method that reduces tax costs on smaller incomes.Read more ▪ Stanbic Bank: 200 SMEs to benefit from Stanbic mentorship programme In a bid to support growing business, Stanbic Bank Uganda is sponsoring a mentorship programme aimed at providing advisory services, basic book keeping and accounting practices and mentoring support to enable owners of Small and Medium Entrepreneurs (SMEs) grow their business.“We believe that the key to achieving sustainable growth of SMEs is by providing the basic skills and mentoring to equip the owners with knowledge and skills to enable them acquire the much needed capital to expand their business,” said Mr Kevin Wingfield, the head personal and business banking Stanbic Uganda.The programme, launched in partnership with Enterprise Uganda, is targeting about 200 SMEs. Speaking at the launch of the programme in Kampala recently, Enterprise Uganda executive director Charles Ocici said the programme will also train SME’s on how to access loans from banks. Read more ▪ Stanbic Bank: Uganda’s economy on the edge “That is a concern” was a phrase repeatedly said by the chief executive officer of Stanbic Bank at an investor briefing in reference to the status of Uganda’s fragile economy. At the briefing Patrick Mweheire delivered what was mostly considered bad news for the economy, especially for the banking sector.“Banking in this kind of environment is going to be hard,” he said highlighting a sudden rise in lending rates, inflationary pressures, a volatile Shilling, rising interest on government debt, widening government expenditure and the elephant in the room.Even with Bank of Uganda playing down any similar spike in money supply during the election season, there are signals that the economy is facing “headwinds” due to these fears. Read more ▪ SBD: Banks swim in profits as loans become more costly Commercial banks in general have had improved performance, according to the published financial statements. The profitability of banks has improved by 25 per cent to Shs536b. The sector performance was beginning to look gloomy when Bank of Uganda (BoU) closed Global Trust Bank over sustained losses. This is a recovery from the reduced profitability when banks experienced a 22 per cent reduction as a result of reduced lending and a fall in income from loans. Banks lent more, earning more from loans as well as growing customer deposits, which grew by 18 per cent to Shs13 trillion.Even with improved performance, the dominance of at least eight banks shows the bigger the bank, the better the profitability. The top eight banks share between them more than Shs1 trillion in assets. Read more ▪ Investors, stock exchange benefit from Stanbic’s listing Stanbic bank Uganda’s listing has seen both investors and the stock exchange benefiting, according to Uganda Securities Exchange (USE). USE explains that Stanbic Bank Uganda has expanded the size of the stock exchange while to shareholders they have made capital gains and have received dividend payment from the bank since it listed on the stock exchange.Addressing analysts and financial journalists on Monday at the bank’s premises, the USE chief executive officer, Mr Paul Bwiso, said: “Stanbic Bank Uganda’s contribution to the stock exchange has been so immense in terms of values, they have added the market size of the exchange and they have paid out dividend consistently without fail since its listing to Read more ▪ Stanbic posts Shs135b profit Uganda’s largest bank, Stanbic Bank, has announced a 32.6 per cent jump in net profit to Shs135b, recovering from slowed profitability.Driven by rising income, increased lending, fees and commissions, the bank presented a much more positive balance sheet. Mr Patrick Mweheire, the bank’s chief executive officer, told reporters and investment firms that the bank was growing above the overall industry averages in all segments.“We continue to lead the profit-after-tax market share. We are now running at around 28 per cent market share in the industry even if we are much lower in market share on loans and advances,” Mr Mweheire said. Read more ▪ Stanbic : Shilling to weaken further, foreign currency denominated loans to suffer Bankers have expressed concern over the continued depreciation of the shilling, saying the volatility will exert pressure on foreign currency denominated loans.Patrick Mweheirwe, Stanbic Bank's Chief Executive Officer (CEO) said the shilling is expected to depreciate by a further 5% before the end of this year, in addition to the 4% depreciation.The depreciation of the shilling is attributed to among others the strengthening of the U.S dollar against other currencies, huge trade balance and increased demand of the dollar from corporate buyers and interbank markets."There will be a remarkable decline in foreign currency denominated loans because people have recognized that with a weak shilling, you cannot afford to borrow in dollars yet you earn in shillings," Mweheirwe said.He speaking during a media briefing to release the bank's audited financial results at Sheraton Kampala Hotel. Speculation is rife that a strong dollar coupled with high election could weaken the shilling this year. Read more ▪ Stanbic Bank signs debut $85m loan Stanbic Bank Uganda (SBU) has signed an $85 million, loan to fund its general business activities, the first time it has borrowed from international loan markets, the main arranger of the facility said.The lender joins a flurry of sub-Saharan African banks that have tapped loan markets, as local institutions look to increase their funding bases and international lenders seek higher returns in emerging economies compared with the low interest rate environment back home.SBU will use the funds to back lending for trade-related finance in chosen sectors such as energy, manufacturing, and infrastructure among others.It is paying an interest rate of 250 basis points over the London interbank offered rate (Libor), a statement from Dubai's Emirates NBD said.Read more ▪ Stanbic’s new boss keen to raise customer satisfaction Stanbic Bank Uganda’s board of directors confirmed the appointment of Patrick Mweheire as Managing Director.Below, Daily Monitor’s Abdulaziizi K. Tumusiime discusses with him Uganda’s banking industry and his plans.What do you make of Uganda’s banking industry?The industry is over banked. 25 banks for this market is a bit on the high side. You can be overbanked and still not meet the requirements of the market. When you look at the composition of the market share, the top 10 banks still account for majority of the market share and that is not going to change any time soon. Each bank has to find its niche. I think this is the challenge we have to overcome. That said, some banks have clearly identified what they want to do.Read more ▪  Loan recoveries push Stanbic profits up to Shs68 billion Improved loan recoveries and pick up in deposits has helped Stanbic Bank Uganda register profit after tax of Shs68.34 billion in the first half, representing a growth rate of 19.23 per cent.This is compared to the same time last year when the bank registered profit after tax of Shs57.3 billion due to hard economic conditions that had hit the country’s economy.The bank’s financial results also indicate total assets increased by 15.72 per cent to Shs3.41 trillion from Shs2.95 trillion in the same period last year.Loans and advances to customers rose by 15.83 per cent to Shs1.58 trillion, while net interest income appreciated by 14.24 per cent to Shs135.86 billion.The results also show cash flows from operating activities were also up 16.62 per cent to Shs90.53 billion.Presenting the half year financial results, the bank’s chief executive officer, Mr Philip Odera, described the new development as business coming back to normality unlike last year when they faced difficult times. Read more ▪ Stanbic’s USE suspension will not hurt stock, analysts say The temporary suspension of Stanbic Bank Uganda from the financial market will not affect the operation of the stock market, industry analysts have said.According to the African Alliance research analyst, Mr Arthur Nsiko, the voluntary suspension is a normal occurrence, saying this one was done with a view to pay off the listed bond ahead of its maturity. “There is a premium (money that will be paid on face value) that goes with paying off the bond and therefore no matter how you look at it, it is not a bad thing both for the industry and the players involved,” Mr Nsiko said when contacted. Stanbic issued a statement announcing voluntary suspension of its trading note on the Uganda Securities Exchange so as to pay off its listed bond before it matures. Read more ▪ Stanbic bank blames reduced profits on high operating costs .High operating costs coupled with the lag effects of the turbulent economic challenges suffered about three years ago, are still evident in Uganda’s banking industry, as banks continue posting mixed financial results.Although three banks including Kenya Commercial Bank (Uganda), Diamond Trust Bank and Dfcu, have so far reported profit growth, Stanbic (the largest bank by assets) and Imperial Bank have reported a profit decline and loss, respectively.According to Stanbic’s audited financial results for the year ending December 31, the bank posted a 22.1 per cent decline in net profit to Shs101.8 billion compared to Shs130.8 billion posted over the same period. Read more ▪ 46 million Stanbic shares on demand Stanbic Bank returned to the fore of activity, selling 1,064,500 shares on Tuesday with turnover of sh32m after trading ended at an average price of sh30 per share. This was 85% of the day’s total traded value.There, however, remains overwhelming demand on the Stanbic counter, reaching 45.6 million shares on Tuesday. Demand is rising by the week as the bank is close to announcing its annual results alongside all listed companies as part of statutory requirements.Investors have, according to analysts, positioned to cash in on the post announcement dividend, a situation which has driven up the demand, although current shareholders are reluctant to give away their positions, creating the price mismatch. Read more ▪ Farmers ignorant about cheap agriculture credit - bank official Despite efforts by the government to avail cheaper agricultural credit through the Agricultural Credit Facility (ACF), a few farmers have taken advantage of the facility to boost productivity, a senior banker has said.Speaking to journalists in Kampala, Stanbic Bank managing director Philip Odera said limited sensitisation about the existence of the facility has led to low uptake of the credit funds.“We partnered with government to offer subsidised lending to agriculture but the challenge has been limited communication about the availability of the funds to the sector,” he said. “We continue to encourage the Small Medium Enterprises dealing in agriculture to take advantage of this cheaper credit to grow the agricultural sector.” Read more ▪ The forthcoming full year dividend and financial performance announcement is driving strong demand for Stanbic shares.On Thursday, investors sought 31 million Stanbic shares in one of its strongest days in the first days of the new year.Market analysts have attributed this to the dividend expectations. Listed companies are expected to post their full year financial statements by the end of April according to statutory requirements.“Institutions want to start buying now to be on the register,” said Joseph Kibuuka from Crested Stocks and Securities research team. Read more ▪ |
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