NAIROBI: Most of the commercial banks recorded huge profits for the year 2014, as they lent our more money and cut down on the number of those who had defaulted on their credit.
The industry’s bellwether Stanbic bank and Standard Chartered bank are the only financial institutions that hit a net-profit above Shs 100bn, keeping the competition for the top spot in country’s banking industry much alive although still firm in the hands of Stanbic.
While both banks had seen their profits plummet by more than 20 per cent in 2013, they regained their footing last year amassing more assets and profits. Stanbic’s profits went up by 33 per cent to Shs 135bn while its assets reached Shs 3.5tn.
Patrick Mweheire, the chief executive director of Stanbic bank, told reporters last month that the bank was “growing above the industry averages.”
On the other hand, Stanchart’s profits jumped by 17.5 per cent to Shs 114bn with assets worth Shs 2.6tn. In a statement, Stanchart’s managing director Herman Kasekende said they had “invested heavily in technology and sharpened focus on mid-sized local companies at an early stage in their lifecycle.”
Ugandan banks remained some of the most profitable institutions in the industry, beating their counterparts from the rest of the continent. Crane bank and Centenary bank maintained their spots in the top five banks in the country in terms of assets as third and fourth respectively. Dfcu bank comes in at the sixth, behind Barclays whose assets hit Shs 1.4tn while Dfcu’s are at 1.39tn. The two banks had their net profits at Shs 41bn each.
Meanwhile, Centenary bank, owned by Catholics and known for being a bank for the low income populace, posted the higher profit among the local banks at Shs 73bn. Its assets reached Shs 1.63tn. Crane bank made a profit of Shs 50.6bn, a seven per cent increase. The bank’s assets reached Shs 1.7tn, the third largest bank in the country.
Housing Finance bank and Finance Trust bank remained closely behind. Finance Trust, which got its licence to operate as a commercial bank last year, and trades mostly with women, grew its assets by 31 per cent to Shs 121bn, beating older banks such as Cairo International.
Finance Trust’s net profit shot up to Shs 1.9bn, from Shs 1.7bn in 2013. Housing Finance bank also had its assets grow, although its profits dropped slightly to Shs 4.3bn.
One Ugandan bank, Imperial bank, owned by Mukwano, had its core capital fall to 24.1bn, which is below the central bank’s requirement of Shs 25bn. In a statement, the bank said: “A further capital injection of Shs 2.3bn by issue of ordinary shares of Shs 1m each was effected in January 2015.”
So, why did banks make all this money? Dr Fred Muhumuza, a senior manager at KPMG, said banks could have made money because they lent more to government at incredibly very high rates.
