Stanbic loan write-offs reduce by Shs22b

Loans written off by Stanbic Bank dropped by Shs22b in the year ended December 2021. According to the bank’s financial results. 
During the period, Stanbic noted loan write-offs had declined from Shs92b in 2020 to Shs70b, signaling improved repayment. 

Loans are written off if a bank believes it will be impossible to recover money contained in a particular loan transaction. 
Speaking in Kampala yesterday, Ms Anne Juuko, the Stanbic chief executive officer, said the bank had during the period also turned around “our asset quality rating from fair to satisfactory enabling a reduction in non-performing loans from 5.77 percent in 2020 down to 3.85 percent. 

During the period, net profits rose to Shs275b from Shs243b, largely due to growth in trading income.  Non-interest revenue reported a growth of 19 percent, enabling earnings to grow to Shs401b from Shs341b in 2020, largely due to an increase in trading income to Shs233.7b from Shshs177.3b. 
Net interest income grew marginally by 1.5 percent to Shshs498b from Shs490b due to growth in customer loans. 
Loans marginally grew to Shs3.7 trillion from Shs3.6 trillion with much of the loans going to critical sectors of the economy such as trading and manufacturing to drive economic recovery.

During the period, Stanbic lent out Shs290b to trade sector while Shs225b was lent out to household. Shs223b went to building and construction while Shs218b and Shs150b went to manufacturing and agriculture, respectively. .
Customer deposits grew by 5 percent from Shs5.4 trillion to Shs5.7 trillion while capital adequacy ratio, which measures the ability of a bank to meet its obligations by comparing its capital to its assets, improved from 18 percent to 21.9 percent. 

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Ms Juuko said that during the period, Stanbic had focused on sustained management of asset quality through proactive engagements, restructuring loan repayments and waiving interest repayment of loans by clients of fragile sectors such as education. 

 “We shall continue to innovate for the customer and avail digitally disbursed affordable credit through bespoke products for women, youth, farmers and our corporate customers,” she said, noting that the full reopening of the economy has accelerated activity in households, manufacturing, construction, trade, agriculture and transport.
Ms Juuko also noted that Stanbic had grown its agency banking presence to cover 96 per cent of districts in Uganda.