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According to Ms Anne Juuko, majority of Stanbic’s transactions, which stand at about 42 percent, are now conducted through agent banking
Stanbic Bank has said it has drastically reduced the number of transactions that are done in its banking halls.
Speaking during release of its half year results in Kampala on Monday, Ms Anne Juuko, the Stanbic chief executive officer, said investment in digital technology had drastically reduced transactions in its banking halls, which during the period fell to just 7 percent.
The bank reported that at least 42 percent of its transactions are done through agent banking, while 20 percent are purely conducted through digital means and another 20 percent through other digital channels.
Ms Juuko indicated that they have injected huge resources in digital channels such as Flexipay, which during the period returned massive growth with its digital wallets rising to more than 275, 000 users and 30,000 merchants.
The growth indicates a move away from traditional banking that had for a long time depended on branch network. It also allows banks to reach wider customer networks due to an improvement in shared technological channels and investment by government.
Ms Juuko noted that given the current shift in banking, it was important that the bank invests in technology to digitise its processes, improve turnaround times and invest in sectors that will drive Uganda’s growth in the long-term.
“This is what is driving our lending choices as well as our approach to entering partnerships in delivering positive social, economic, and environmental impact in or chosen sectors,” she said.
During the period, Stanbic reported a fall in impairment costs and provisioning for loan losses thus leading to a reduction in non-performing loans.
The bank’s non-performing loans reduced from 4.7 percent in March to 3.9 percent in June, which was lower than the industry average of 5.8 percent.
Non-performing loans have been growing due to elevated risks in the financial markets and the economy as a whole. The reduction in non-performing loans had been achieved despite an increase in interest rates and growing volatility due to rising inflationary pressures.
During the period, Stanbic reported a reduction in impairment losses to Shs19.3b from Shs27.3b, which continue to reduce from the Shs70.4b reported in 2021.
Ms Juuko noted that the bank had returned a reduction in loan defaults due to a pickup in repayment following reopening of the economy and end of Covid-19 related relief measures.
“Our credit situation is getting much better. Loan repayments are improving,” she said, noting that despite a difficult economic environment characterised by the high cost of living and operations, the credit loss ratio to customer had reduced to 1 percent from 1.5 percent.
During the period, Stanbic reported an 8.8 percent growth in customer deposits, from Shs5.7 trillion to Shs6.2 trillion, while loans and advances rose from Shs3.7 trillion to Shs3.8 trillion. The growth, Ms Juuko noted had strengthened the bank’s net profits, which increased to Shs162b from Shs158b in the same period last year.
The growth, she said, was driven by a mixture of lending coupled with a diversified products portfolio that focused on positioning the bank to drive recovery through balancing credit risks, prudent cost management and substantive investment in technology for innovation.
Lending to Saccos
During the period, Ms Juuko noted Stanbic had committed substantial resources in growing social groupings, lending at least Shs13b to Saccos with a membership of about 3.5 million with the aim of financing low cadre social projects.
“We are lending at 10 percent per month for Saccos and 12 percent to agriculture.”