Kampala, Uganda | THE INDEPENDENT | Uganda’s Deposit Protection Fund has recorded a 15% surge in assets to Shs 1.15 trillion for the year ended June 2022, with investments held in government treasury bills and treasury bonds.
Financial results released on Jan.31 show that the fund’s surplus and reserves account increased from Shs952bn to Shs 989bn due to an increase in comprehensive income worth Shs 144bn earned during the period largely derived from investment income and premium contributions from member institutions.
The fund’s total income increased from Shs177bn to Shs 218bn all derived from investment incomes and premium contributions. Income from investments increased by Shs 26bn while that from contributions grew by Shs 8bn.
“The growth in interest income was due to an increase in the size of the investment portfolio while increased deposit levels in the banking sector resulted in higher annual premiums remitted to the fund,” said the Fund’s CEO Julia Clare Olima Oyet.
She said Fund’s operational costs fell more than three-fold from Shs 20bn to Shs6bn during the same period under review following a Shs11bn tax recovery from Uganda Revenue Authority.
“Overall, the cost-to-investment income ratio stood at 10% which was below the approved board limit of 25%,” she said.
Meanwhile, the banking sector’s total deposits grew by 6.5 % from Shs31 trillion to Shs33 trillion during the period under review. Out of these, 18.4 % (Shs 6.1 trillion) of the total deposits were protected. This is above the 10 % benchmark put in place by the East African Monetary Affairs Committee.
Additionally, the sector witnessed an increase of 8.4 %in the total number of bank accounts from 19.1 million as of June 30, 2021, to 20.7 million as of June 30, 2022, signaling growing confidence among the public in the banking sector.
The DPF is a government agency established under the Financial Institutions Amendment Act (2016) to compensate depositors with up to Shs 10 million in the event of bank closure.