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Strong revenue growth and strategic lending drive Stanbic’s strongest first-half performance
Kampala, Uganda | JULIUS BUSINGE | Stanbic Uganda Holdings Limited (SUHL) has posted a 28.2% increase in net profit for the first half of 2026, highlighting the resilience of Uganda’s banking sector even as businesses continue to grapple with the cost of credit and the risks associated with borrowing.
The group’s Profit after Tax rose to Shs356.8 billion for the six months ended June 30, 2026, from Shs278.4 billion recorded in the same period last year.
The performance was supported by higher income, improved asset quality and disciplined cost management, while the group continued to expand its lending and investment activities.
For shareholders, the stronger earnings come with a larger immediate return. The Board approved an interim dividend of Shs220 billion, representing a 57.1% increase from the previous payout, equivalent to Shs4.30 per share.
The results come against a backdrop of an economy that is expanding but where access to affordable finance remains a concern for many businesses, particularly smaller enterprises.
Uganda’s inflation has remained relatively contained under the Bank of Uganda’s inflation-targeting-lite framework, supported by monetary policy decisions around the Central Bank Rate. However, low inflation does not automatically translate into cheap credit for businesses.
Revenue growth
Stanbic’s total income increased by 21.2% to Shs830.3 billion, supported by growth in both interest and non-interest income.
Net interest income rose by 16.7% to Shs433.6 billion, while non-interest revenue grew by 26.4% to Shs396.6 billion, largely supported by stronger trading activity.
Non-interest income now accounts for 47.8% of the group’s total income, pointing to the growing importance of diversified revenue streams beyond traditional lending.
The group also kept operating costs under control. Costs increased by 14%, compared with 21.2% growth in income, producing a positive 7.2% “jaws” effect and reducing the cost-to-income ratio to 44.3%.
Improved asset quality also supported profitability through a net release in credit impairments and recoveries from loans that had previously been written off. The stronger earnings lifted return on average equity to 30.4%, up from 26.9% in June 2025.
The group’s operating structure brings together five businesses: Stanbic Bank Uganda, the commercial banking arm; Stanbic Business Incubator, which focuses on enterprise development; SBG Securities Uganda, which provides brokerage and asset management services; Stanbic Properties, which manages real estate interests; and FlyHub Uganda, the group’s digital technology transformation entity.
For the bank, the figures point to stronger operating efficiency and improved capacity to generate returns from shareholders’ capital. For the wider economy, however, the bigger question remains how commercial bank profitability can coexist with the need for affordable financing for productive businesses.
Credit challenge
High borrowing costs have remained one of the persistent complaints from Uganda’s private sector. Although the Central Bank Rate is significantly lower than commercial lending rates, borrowers pay additional risk and other costs reflected in the final interest rate. Depending on the borrower and type of facility, some businesses continue to face rates of more than 20% per year.
Economists say the difference between monetary policy rates and actual lending rates is important when assessing the transmission of monetary policy into the real economy.
The Bank of Uganda uses the Central Bank Rate under its inflation-targeting-lite framework to influence economic activity and keep inflation around its medium-term target of 5%. When inflationary pressures are high, tighter monetary policy can help contain demand and price pressures. When inflation is subdued, there is greater room to support economic activity.
But commercial banks must also price for credit risk, operating costs, funding costs and the possibility of default. This creates a difficult balance. Banks need to remain profitable and protect depositors’ funds, while businesses need credit at rates that allow them to invest, create jobs and generate enough returns to service their loans. The consequences can be severe when businesses fail to meet their obligations.
Loan defaults can result in the enforcement and sale of collateral, including property pledged to secure financing. For a business already facing declining sales or poor cash flow, losing productive assets can further weaken its ability to recover.
The challenge is therefore not simply about interest rates. Business governance, financial discipline, record keeping, cash-flow management and the ability of enterprises to adapt to changing market conditions also influence whether borrowed money produces the returns required to repay it.
Balance sheet expands
Against this backdrop, SUHL’s balance sheet continued to expand. Total assets increased by 13.9% year-on-year to Shs13.4 trillion, while customer deposits rose by 9.4% to Shs9.2 trillion.
Net loans and advances to customers increased by 8.2% to Shs5.35 trillion, reflecting continued demand for financing from households and businesses.
Mark Ocitti Ongom, chief executive of Stanbic Uganda Holdings Limited, said the group’s commercial strategy remains aligned with Uganda’s broader economic ambitions.
“Our commercial strategy is aligned with national aspirations; over Shs1 trillion of current lending supporting the tenfold growth ambition,” Ongom said.
He said Stanbic’s strategy is linked to Uganda’s ambition of growing the economy from about US$50 billion to US$500 billion by 2040.
About 20% of Stanbic Bank Uganda’s Shs5.3 trillion loan book is currently invested in agro-industrialisation, tourism, mining, and science and technology, collectively referred to as the ATMS sectors.
The focus on these areas is significant because Uganda’s economic transformation will require financing to move into productive activities capable of creating jobs, expanding exports and increasing domestic production.
Financing development
Mumba Kenneth Kalifungwa, chief executive of Stanbic Bank Uganda, said the financial performance must ultimately translate into wider economic and social value.
“As we release our financial results for the first half of 2026—highlighted by a robust Profit After Tax of Shs357 billion, a 28.2% growth year-on-year, and total assets expanding to Shs13.4 trillion—our commitment is to ensure that every shilling of commercial strength translates directly into societal value,” Kalifungwa said.
During the first half of the year, the group secured nearly half a trillion shillings in global funding partnerships to support various development initiatives.
These included a Shs20 billion grant from the Gates Foundation targeting women entrepreneurs and a Shs420 billion climate-resilience credit line from the European Investment Bank.
The group also deployed Shs64 billion in youth loans and invested Shs60 billion in renewable energy during the six months.
Such financing is increasingly important as Uganda seeks to expand private-sector investment while addressing challenges around unemployment, productivity and business competitiveness.
However, economists note that increasing the volume of credit alone is not enough. The quality, pricing and destination of credit matter.
Financing that goes into productive sectors can help businesses expand and generate income, while borrowing used to meet recurrent expenses without improving cash flows can increase debt pressure.
This makes financial literacy, corporate governance and business planning important complements to commercial lending.
SMEs need support
Stanbic’s financial performance has also been accompanied by increased support for small and medium enterprises, which remain central to employment and private-sector growth.
Through the Stanbic Business Incubator, the group supported 33,850 SMEs during the first half of 2026, while 220 businesses were helped to formalise their operations.
The incubator also facilitated Shs40 billion in loans to small businesses that had undergone capacity-building programmes.
Catherine Poran, chief executive of Stanbic Business Incubator, said strengthening businesses before financing them is critical to creating sustainable economic value.
“When businesses become competitive, they become investable. When they become investable, they create economic and commercial value,” Poran said.
For many SMEs, access to finance remains intertwined with the quality of their internal systems. Businesses with weak records, poor governance or inadequate cash-flow management can struggle to demonstrate their ability to repay loans.
This is particularly important because business failures do not only affect owners. They can result in job losses, unpaid suppliers, non-performing loans and the eventual disposal of collateral.
The wider economy therefore benefits when banks, government agencies and business-support organisations help enterprises become more formal, productive and financially resilient.
Balancing returns
Stanbic’s first-half results present two important sides of Uganda’s financial story. On one side is a profitable banking sector with expanding assets, deposits and lending, demonstrating the capacity of financial institutions to mobilise capital and support economic activity.
On the other is a private sector that continues to seek affordable and longer-term capital while dealing with high operating costs, business failures, governance weaknesses and the consequences of loan defaults.
The two realities can coexist. A financially strong bank is better positioned to mobilise deposits, absorb economic shocks and finance productive investment. At the same time, sustainable economic transformation requires borrowers to become stronger, more transparent and better governed.
Uganda’s relatively stable inflation environment provides an important foundation for investment. But for monetary stability to translate into broader economic benefits, businesses need access to financing that matches the nature and expected returns of their investments.
Stanbic’s results show that there is continued demand for credit and that banks can grow profitably while expanding their loan books.
The broader economic test will be whether this credit continues to reach productive sectors on terms that allow businesses to invest, grow and repay without exposing them to unsustainable debt or the loss of productive assets.
With profitability, deposits, assets and lending all registering growth, SUHL enters the second half of 2026 with stronger financial capacity. The challenge now is to ensure that this commercial strength continues to support sustainable investment, jobs and productivity while maintaining the financial discipline required to protect both borrowers and lenders.
