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More people left banking halls for digital platforms – Stanbic

Stanbic Bank Chief Executive Patrick Mweheire. PHOTO via @stanbicug

Kampala, Uganda | THE INDEPENDENT | Stanbic Bank has said more of its customers are leaving the banking halls, choosing to do most of their transactions either online or through banking agents.

Stanbic Bank Chief Executive Patrick Mweheire says that more than 80 per cent of their transactions, during the last half of the year, were on digital platforms. Agent banking made up 20 per cent of the bank’s transactions, with the bank enlisting 1,000 agents across the country.

Mweheire was speaking during the release of the Banks 2019 half-year results at Protea Hotel this morning.

Stanbic announced that its net profit grew by 40 per cent to 134 billion Shillings in half-year to June 2019 up from 96 billion Shillings made in the same period in June 2018, remaining the most profitable bank in the country. The bank’s assets grew to 6 trillion Shillings from 5.1 trillion Shillings as at December 2018.

The bank said loans given outgrew 21 per cent to 2.7 trillion Shillings June 2019 from 2.2 trillion Shillings in June 2018. The growth in loans should be good news because it shows businesses are getting money to invest and expand.

“The growth has been largely due to improved economic activity as credit growth across all customer segments improved. We remain a key enabler in major sectors of Uganda’s economy such as agriculture, manufacturing, construction, on top of also helping to underpin small-medium enterprises (SMEs),” Mweheire said.

This shift in preference has an impact for the jobs, with many banks choosing to lay off staff in preference for agents they don’t pay salary but commission depending on the volume and value of transactions they do.  But the platforms save time for people who are tired of queues in the branches.

For the banks, it is good news because it cuts on the cost of operations and the need for brick and mortar branches. Some banks have closed some branches and preferred to strengthen their digital platforms.

But in terms of value, more money is being transacted in the bank. This means people, who are the majority, with low-value transactions are the ones moving away from the banking halls, including those paying school fees, and utilities.

Mweheire said this is good because it is expensive to transact from the branches.

Sam Mwogeza, the Stanbic Chief Financial Officer said that the increase in the bank’s total assets was supported by increased customer deposits, appropriately deployed across the different asset classes, mainly customer loans, government securities and interbank lending.

Mweheire said Stanbic, through the Business Incubator, will continue to focus on skilling the small and medium enterprises (SMEs) which are the engine of growth for Uganda’s economy, employing over 2.5 million people.

“To date, the Stanbic incubator has successfully trained three sets of groups and a total of 1062 entrepreneurs from 300 small and medium enterprises have graduated from the incubator,” he said.

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