Kampala, Uganda | THE INDEPENDENT | Equity Bank is one of the 25 commercial banks offering financial services in Uganda. The Independent’s Julius Businge spoke to the Bank’s Executive Director, Anthony M. Kituuka on their strategy to deliver good growth in 2019 and beyond.
What are your expectations in this New Year in the banking industry?
We expect to deliver double digit growth in profits. We will show good balance sheet and growth in our core areas of impact in terms of number of customers that we want to grow by 50%. It is looking positive enough for us.
How was 2018 with regard to developing a good foundation to deliver growth?
2018 was a good year from our perspective. Equity Bank’s mission and vision focuses on social economic transformation. The emergence of agent and digital banking will help us a lot in driving growth. Our ‘Equiduuka’ outlets under agency banking are doing very well and helping us reach more people that are far from our physical branches.
What opportunities do you envisage from the economy that is being reported as performing beyond earlier projections?
It is a good sign that we are dealing with the challenges faced in the recent years. Anualised growth of 7-8% for the first 10 months of 2018 means sectors like manufacturing, real estate, agriculture, oil and gas are creating opportunities for the economy. We do not expect to have general elections in most of our good markets in the region and that means economic activities will go on smoothly. We also believe that technology and infrastructure developments will boost economic activity.
What makes Equity Bank different from others?
Our aim is inclusion for all in the financial services sector. Our accounts have no minimum account balance and no monthly charges. We only have transaction charges. We think we should not charge people for keeping money with us. From our digital side of business, we are now lending money to our customers on mobile phones. We have online banking service for corporate customers. Our Equiduuka outlets are very popular and our customers can locate them with ease anytime, anywhere.
How is Equity Bank faring in terms of Non-Performing Loans?
The banking sector had a correction over the last few years. Through the guidance of our regulator, non-performing loans at industry level are down to around 4-5% from around 10% a few years back. The Credit Reference Bureau has helped a lot to identify creditworthy clients and related services. Our loan book has grown tremendously. The bank closed its net loan book at around Shs240bn in 2015 and Shs400bn in 2017 we had anticipated Shs800bn in 2018. We believe traditional sectors like real estate, manufacturing, agriculture, trade, construction, oil and gas and related activities will continue to drive lending going forward. We are looking at tourism and its value chain as one other area to focus our lending given its potential and contribution to the economy.
What sector challenges does Equity Bank face?
The level of saving in Uganda is low. People have money but prefer keeping it in their pots and mattresses at home. We are looking at how to encourage people have bank accounts, and this is the reason for growing up our branches and rolling out Equiduuka outlets. However, we believe that savings will go up and the cost of loans and services will drop as more people join the banking industry. Cybercrime is a true risk given that we are part of the global financial market. We have built data centres to protect and monitor data. Insurance also does for us great work in managing these risks.