Stanbic Holdings winds up fintech subsidiary FlyHub after five-year digital experiment

Stanbic Uganda Holdings Limited (SUHL) has moved to wind up its fintech subsidiary, FlyHub Uganda Limited, bringing to an end a digital innovation venture that was established to support the Group’s technology transformation agenda.

The decision, disclosed in SUHL’s 2025 Annual Report and Financial Statements, sees the company write down its entire Shs10 billion investment in the subsidiary, reducing FlyHub’s carrying value to zero from Shs10 billion recorded in 2024.

The move marks a significant shift for a company that was created as part of Stanbic’s strategy to expand beyond traditional banking after the Group adopted a holding company structure in 2019.

FlyHub was incorporated on October 8, 2020, and positioned as the Group’s technology and innovation arm. Its mandate was to develop financial technology solutions and support digitisation initiatives across the Stanbic ecosystem.

The subsidiary sat alongside Stanbic Bank Uganda, SBG Securities Uganda, Stanbic Business Incubator and Stanbic Properties as one of the five pillars through which SUHL intended to diversify its business model.

However, shareholders resolved on October 30, 2025, to wind up the company through the required regulatory processes.

“FlyHub is no longer a going concern,” the Group stated in its annual report.

The closure raises questions about the challenges financial institutions face when attempting to build standalone technology businesses within traditional banking structures.

While Stanbic has not publicly detailed the reasons behind the decision, industry sources familiar with the matter suggest FlyHub struggled to establish itself as the Group’s primary technology provider.

According to one source, the subsidiary was unable to secure some of the major technology assignments required to sustain its operations and scale its business.

The source said that for critical technology services, particularly cloud infrastructure and other high-risk systems, the bank often relied on established global providers rather than its in-house subsidiary.

As a result, FlyHub reportedly found itself competing for smaller projects while lacking sufficient access to the large contracts needed to build a sustainable revenue base.

The challenge was compounded by the difficulty of expanding aggressively into the external market, leaving the company caught between serving its parent group and building an independent client portfolio.

The closure comes despite digital transformation remaining a central part of Stanbic’s long-term strategy.

In its 2025 Annual Report, SUHL identifies digital transformation as one of its key strategic priorities and highlights technology-related risks, including cyber threats, operational resilience and large-scale modernisation programmes.

This suggests the Group is not stepping back from technology investment but may instead be shifting towards alternative models, including partnerships with larger technology providers or integrating innovation directly within its core banking operations.

The winding up of FlyHub also highlights the dominant role played by Stanbic Bank Uganda within the Group’s structure.

Although SUHL was designed as a diversified financial services holding company, the bank continues to account for the overwhelming share of the Group’s assets, earnings and growth.

The Group reported a profit after tax of Shs591 billion in 2025, representing a 23.6 percent increase from Shs478 billion the previous year. Total assets grew to Shs11.5 trillion, customer deposits rose to Shs8 trillion, while net loans expanded to Shs5.1 trillion.

Board Chairman Baker Magunda described the performance as robust, citing strong growth in profitability, operational efficiency and returns to shareholders.

While FlyHub’s closure removes one of the Group’s diversification ventures, other non-bank subsidiaries continue to gain traction.

SBG Securities emerged as one of the strongest performers in 2025, growing assets under management by 389 percent to Shs538 billion and strengthening its position in Uganda’s investment management industry.

Stanbic Business Incubator and Stanbic Properties also remain active within the Group’s broader ecosystem strategy.

For shareholders, the decision to close FlyHub may ultimately be viewed as a portfolio rationalisation rather than a retreat from innovation. The write-off acknowledges that one digital venture failed to achieve the scale originally envisioned, while allowing the Group to focus resources on businesses that have demonstrated stronger commercial viability.

The outcome underscores a reality increasingly facing financial institutions worldwide: digital transformation remains essential, but not every fintech experiment succeeds in becoming a sustainable standalone business.