Overview:
The bank’s customer deposits grew to Shs2.5 trillion attributed to an increase in the active customer base as a result of new to bank acquisitions and reactivation of inactive accounts.
Absa Bank Uganda on Tuesday, 18 April 2023 released its financial results for the year ended December 2022, indicating profit growth of 28.9%.
Speaking at the release, Mumba Kalifungwa, the Managing Director Absa Bank Uganda, said they posted growth in customer deposits, lending, revenues as well as net profit and assets.
The bank’s profit after tax was Shs141 billion.
“Despite an uncertain operating environment, I am pleased to report that it was a year of growth for us at Absa. This performance is underpinned by the resilience of Uganda’s economy which grew by 4.6% in the face of a global economic downturn and tighter financial conditions,” said Kalifungwa.
Absa Bank also reported a 19.8% growth in customer loans to Shs1.6 trillion, which was attributed mainly to increased demand for credit following the recovery of the economy from the effects of COVID-19.
The bank’s customer deposits grew to Shs2.5 trillion attributed to an increase in the active customer base as a result of new to bank acquisitions and reactivation of inactive accounts.
Michael Segwaya, the Chief Financial Officer, said the bank’s total assets grew by 5.6% to Shs4.23 trillion maintaining a 7.3% cumulative annual growth rate.
“This growth is largely attributable to a strong increase in customer loans as we continue to support our individual, SME and commercial customers in their personal and business endeavours,” he said.
“Despite the macro-economic challenges affecting the business and operating environment, we supported the economy’s growth trajectory financing key sectors including agriculture, trade, construction and real estate and manufacturing. Our total lending to the agriculture sector currently stands at shs158 billion, reflecting a growth of 40% from 2021, trade at UGX306 billion growing by 25% from 2021 and manufacturing at shs196 billion growing by 14% from the previous year,”
Mumba Kalifungwa, Managing Director Absa Bank Uganda
The bank, however, reported a significant drop in impairment.
“We are pleased to report that impairment reduced substantially, resulting from an improvement in the construct of our loan book. It is a further reflection of our efforts to help customers regain and improve their ability to meet their credit obligations. Through sustained customer engagement, providing the necessary business and financial advisory, we were able to support our customers businesses, most of which were in distress, to recover from the lockdown impact,” Kalifungwa added.
“Despite the macro-economic challenges affecting the business and operating environment, we supported the economy’s growth trajectory financing key sectors including agriculture, trade, construction and real estate and manufacturing. Our total lending to the agriculture sector currently stands at shs158 billion, reflecting a growth of 40% from 2021, trade at UGX306 billion growing by 25% from 2021 and manufacturing at shs196 billion growing by 14% from the previous year,” he added.
In the New Year 2023, the bank said its priorities remain cantered around improving customer and digital experience, delivering, and protecting returns, developing people, and ensuring a sustainable control environment.
“A 12% increase in total equity denotes our ability to finance economic expansion across all strategic sectors. We are very well capitalized, financially stable, solid, and growing. Over the near and medium term, we project that economic growth will be supported by developments in the oil sector and a rebound in agricultural output on improved weather conditions. We are already seeing a reduction in inflation which signals better days head. We intend to put sustainability at the centre of everything we do to deliver shared value within our community,” Kalifungwa said.