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Bank financial results reporting season starting soon.
Uganda's largest bank by assets, @stanbicug is the first to release financial results for 2020. According to the CEO, Anne Juuko, 2020 "was a year riddled with challenges brought on by the pandemic...but the bank has shown resilience."
Profit-After-Tax
6% to UGX243bn ( @stanbicug after tax profit had been on a consistent upward growth trajectory since 2016).
Reduced profitability was due to a 12.7% rise in expenses to UGX556bn. Largest contributor to rising expenses was provisions for bad debts (
110%)
6% to UGX243bn ( @stanbicug after tax profit had been on a consistent upward growth trajectory since 2016). Reduced profitability was due to a 12.7% rise in expenses to UGX556bn. Largest contributor to rising expenses was provisions for bad debts (
110%)
Provisions were expected to rise due to the difficult operating environment borrowers faced in 2020. This is also noticeable in the Non-Performing Loans (NPLs)
NPLs 19.4% to UGX219bn BUT represent 6% of the @stanbicug total loans, compared to 6.4% in 2019.
NPLs
19.4% to UGX219bn BUT represent 6% of the @stanbicug total loans, compared to 6.4% in 2019.
Additionally @stanbicug debt write-off rose by 202% to UGX48bn.
Despite the rise in provisions and write-off, the bank is still well capitalized. Core capital position by 18% to UGX918bn.
Due to the reduced profitability, income tax paid reduced by 13.8% to UGX77.5bn
Despite the rise in provisions and write-off, the bank is still well capitalized. Core capital position by 18% to UGX918bn.
Due to the reduced profitability, income tax paid reduced by 13.8% to UGX77.5bn
How did @stanbicug make money?
Loans26.8% to UGX3.6trillion leading to interest income on loans toby 5.6% to UGX421.4bn
62.3%in govt securities to UGX2.2trillion leading interest income by 15.4% to UGX266bn.
However, non-interest related income declined.
Loans
26.8% to UGX3.6trillion leading to interest income on loans toby 5.6% to UGX421.4bn62.3%
in govt securities to UGX2.2trillion leading interest income by 15.4% to UGX266bn. However, non-interest related income declined.
The growth in @stanbicug's interest income led to overall income growth of 8.6% to UGX876.8bn. Due to a 13.7% rise in total expenses to UGX556bn, this led to a drop in net income and gross profit.
Other positives for bank include the 30% in total assets to UGX8.5trillion (meaning @stanbicug will retain the #1 spot) & 16.3%in customer deposits to UGX5.5trillion. (Interest spent on deposits18% to UGX30.3bn)
Shareholders will receive a divided of UGX1.95 per share.
in total assets to UGX8.5trillion (meaning @stanbicug will retain the #1 spot) & 16.3%in customer deposits to UGX5.5trillion. (Interest spent on deposits18% to UGX30.3bn)Shareholders will receive a divided of UGX1.95 per share.
Next is @dfcugroup, the 5th largest bank by assets. The board, in a note to the published results said even though they had to make provisions on bad debts (due to the impact of Covid19 on businesses/people), which affected profitability, there were some positives for the bank.
Let's start with what people like to see. After-tax-profit for @dfcugroup67.5% to UGX24.3bn. As highlighted in the profit warning issued by the bank a few weeks ago, profitability was expected to reduce due to provisions on bad debts + assets from the Crane Bank acquisition.
67.5% to UGX24.3bn. As highlighted in the profit warning issued by the bank a few weeks ago, profitability was expected to reduce due to provisions on bad debts + assets from the Crane Bank acquisition.
Provisions for bad debts108% to UGX30.6bn. The bank also highlighted a fair valuation loss of UGX50.4bn on assets (loans) acquired in 2017 from Crane Bank. This ploughed into the income of the bank contributing to the @dfcugroup reduction in profit.
108% to UGX30.6bn. The bank also highlighted a fair valuation loss of UGX50.4bn on assets (loans) acquired in 2017 from Crane Bank. This ploughed into the income of the bank contributing to the @dfcugroup reduction in profit.
Other indicators of the operating environment being affected by Covid19 include the 5.6%in NPLs to UGX94bn, representing 5.2% of total @dfcugroup loans.
in NPLs to UGX94bn, representing 5.2% of total @dfcugroup loans.
So, where did the money @dfcugroup make come from?
The bank total incomeby just 0.35% to UGX415.2bn.
Whereas interest income on loans4.4% to UGX256bn (due to 15%in lending to UGX1.7trillion), other earnings like interest on govt securities + non-interest income dropped.
The bank total income
by just 0.35% to UGX415.2bn. Whereas interest income on loans
4.4% to UGX256bn (due to 15%in lending to UGX1.7trillion), other earnings like interest on govt securities + non-interest income dropped.
The drop in interest on govt securities came about despite the 13%to UGX573bn in govt and other securities.
The non-interest income for @dfcugroup dropped to UGX68.8bn in 2020 from UGX190bn in 2019. This due to a reduction in fees and commissions income.
to UGX573bn in govt and other securities. The non-interest income for @dfcugroup dropped to UGX68.8bn in 2020 from UGX190bn in 2019. This due to a reduction in fees and commissions income.
Noticeable from the @dfcugroup results is that the marginal less than 1% growth in total income was gobbled up by 21% growth in expenses to UGX382bn.
Importantly the bank remains profitable with core capital slightly by 2.2% to UGX482bn
Importantly the bank remains profitable with core capital slightly by 2.2% to UGX482bn
The core operations of @dfcugroup (lending and taking deposits) remained positive.
Assets19% to UGX3.5trillion
Customer deposits27% to UGX2.6trillion
For the govt, drop in profitability led to 69%to UGX8.2bn in income tax from the bank.
Assets
19% to UGX3.5trillionCustomer deposits
27% to UGX2.6trillionFor the govt, drop in profitability led to 69%
to UGX8.2bn in income tax from the bank.
For the @dfcugroup shareholders, the hope was for better results on the profitability front. The faster dfcu consolidates & sheds off the effects of acquiring Crane Bank, the better the fortunes.
The shareholders will get a dividend of UGX132.17 per share
The shareholders will get a dividend of UGX132.17 per share
Story by @KHISAISAAC in the @UGIndependent on the banking results for @dfcugroup & @stanbicug
Dividends for banking investors down but better than expected https://www.independent.co.ug/dividends-for-banking-investors-down-but-better-than-expected/
Dividends for banking investors down but better than expected https://www.independent.co.ug/dividends-for-banking-investors-down-but-better-than-expected/
Today, @kcbbankug released its 2020 financial results. The bank recovered from a UGX13.5bn loss in 2019 to post an after tax profit of UGX13bn in 2020. The KCB profit was driven by a 29.4% reduction in expenses.
Below are some select highlights from @kcbbankug's results.
Net profit197% (from a loss) to UGX13bn
Loans9% to UGX253.3bn
Govt Securities 30% to UGX127.7bn
Deposits
32.7% to UGX445.5bn
Total Income3.7% to UGX78.6bn
Total Expenses 29.4% to UGX59.6bn
Net profit
197% (from a loss) to UGX13bn Loans
9% to UGX253.3bnGovt Securities
30% to UGX127.7bn Deposits
32.7% to UGX445.5bn Total Income
3.7% to UGX78.6bnTotal Expenses
29.4% to UGX59.6bn
How @kcbbankug made money in 2020? Although total income was down in 2020, most income came from interest earnings on loans ( 2.2%), interest on govt securities (14.7%) and non-interest income - fees and commissions - (24.7%).
2.2%), interest on govt securities (14.7%) and non-interest income - fees and commissions - (24.7%).
However, @kcbbankug 29.4% reduction in expenses offset the 3.7% reduction in income leading to operating profitability of UGX19bn.
All expenses in the bank reduced in 2020. Importantly was that in 2020, KCB did not have an net impairment charge on its income.
All expenses in the bank reduced in 2020. Importantly was that in 2020, KCB did not have an net impairment charge on its income.
@kcbbankug's Non-performing Loans (NPLs)4% to UGX23bn (about 9% of the total loan book - 9.5% in 2019). Bad debts written off34.2% to UGX4.7bn. The core capital position of the bank 25%to UGX67bn.
The bank paid 30% (UGX5.9bn) of the operating profit income taxes.
4% to UGX23bn (about 9% of the total loan book - 9.5% in 2019). Bad debts written off34.2% to UGX4.7bn. The core capital position of the bank 25%to UGX67bn. The bank paid 30% (UGX5.9bn) of the operating profit income taxes.
Shortly, I'll provide some highlights on the impressive @UgEquityBank 2020 financial results.
The @UgEquityBank 2020 results released on April 19, show a continued trend of improved growth for a bank that started operations in 2008 when it acquired Uganda Microfinance Limited. Equity has consolidated & is perhaps one of the fastest growing/improved banks.
In 2020, @UgEquityBank's after-tax profit grew by 53.2% to UGX57bn, indicating an impressive performance by the bank.
How did @UgEquityBank improve its profitability?
Loans25% to UGX1.26trillion which led to interest earned on lending to34% to UGX200bn.
Interest earned on govt securities68% to UGX28.5bn
Non-interest income10% to UGX59bn.
Loans
25% to UGX1.26trillion which led to interest earned on lending to34% to UGX200bn. Interest earned on govt securities
68% to UGX28.5bn Non-interest income
10% to UGX59bn.
In what was a tough operating environment due to Covid19 + the restrictions, @UgEquityBank was able to "milk" its assets better.
Total income32% to UGX292bn
Total expenses 26.6% to UGX211bn
Total income
32% to UGX292bnTotal expenses
26.6% to UGX211bn
The rise in @UgEquityBank's expenses was due to:
71.3% to UGX24bn in provisions/impairment for bad debts
31% to UGX37.8bn in interest expenses on deposits
27% to UGX132.8bn in operational expenses
52% to UGX7bn in management fees
71.3%
to UGX24bn in provisions/impairment for bad debts31%
to UGX37.8bn in interest expenses on deposits27%
to UGX132.8bn in operational expenses 52%
to UGX7bn in management fees
The faster growth in income offset any pressure on expenses for @UgEquityBank, leading profit before tax to 47% to UGX80.5bn.
The @URAuganda collected UGX26.2bn (30.6% growth from 2019) of this amount, representing 28% effective income tax.
47% to UGX80.5bn. The @URAuganda collected UGX26.2bn (30.6% growth from 2019) of this amount, representing 28% effective income tax.
Of @UgEquityBank's UGX1.26trillion loan book, 3.9% (UGX49.2bn) were Non-performing loans(NPLs). This is a rise from 2019, where 1.4% of total loans were classified as NPLs. Still, the 2020 NPL rate for Equity is below the banking sector average in Uganda, just like in 2019.
Due to the growth in lending to the private sector (24.8% rise to UGX1.26trillion) + lending to the govt (63.8% rise to UGX317.8), it was yet another milestone for @UgEquityBank as it crossed the UGX2trillion mark in terms of assets.
Assets rose by 27% to UGX2.06trillion.
Assets rose by 27% to UGX2.06trillion.
Customer deposits 30.2% to UGX1.62trillion (people decided to keep their money in the banks, it appears).
Bad debts written off 71.4% to UGX4.4bn
Core capital46% to UGX296.6bn.
Overall, a good year for @UgEquityBank
30.2% to UGX1.62trillion (people decided to keep their money in the banks, it appears). Bad debts written off
71.4% to UGX4.4bn Core capital
46% to UGX296.6bn. Overall, a good year for @UgEquityBank
Shortly, @AbsaUganda will be releasing its financial results for 2020. I'll tweet the highlights from the financial results and remarks from the #AbsaResults2020 event.
"Uganda and @AbsaUganda felt the impact of the pandemic in 2020. As the board, we are proud of the response by the Absa team during pandemic (operations, staff & customers)." Nadine Byaruhanga Board Chairperson Absa Uganda #AbsaResults2020
