Last October, the Bank of Uganda ordered the sacking of the then managing director, Sameh Mahmud Krekshi, for overdrawing his account. In 2016, the lender also made another loss worth Shs 13.4bn.
Tropical Bank also registered an increase in bad loans written off from Shs 12bn to Shs 17bn during the period under review.
However, the good development coming from the Libyan owned bank is that its assets increased slightly from Shs 283bn to Shs289.54bn during the period under review.
At the same time, customer deposits increased from Shs 166.6bn to Shs182.6bn as the bank’s Non-Performing Loans dwindled.
Meanwhile, dfcu recorded a decline in Non-Performing Loans though it remains the highest in the country’s banking industry. The dfcu NPL fell from Shs 96.6bn in 2017 to Shs 80bn in 2018.
Dfcu was followed by Barclays and Centenary Bank that also recorded a decline in NPL’s from Shs 106bn and Shs 62.2bn to Shs 53bn and Shs 39.8bn, respectively during the period under review.
Similarly, DTB, Standard Chartered Bank and Tropical Bank recorded a sharp decline in NPLs.
Financial observers told The Independent in an interview that the performance of the banking industry follows a similar trajectory to that of the economy.
“The NPL have been coming down because customers have been able to borrow and repay the loans because of the good performance of the economy,” said Aeko Ongodia, the Chief Executive Officer of Xeno technologies, an online investment management platform based in Kampala.
“This implies that if the economy performs well, we are also likely to see good performance in the coming year.”
Uganda’s economy is projected to grow at 6.3% in the current financial year 2018/19 and also in the next financial year 2019/2020, following a recovery from the slump during financial year 2016/17, according to the International Monetary Fund.
Ongodia, however, said multinational banks such as Stanbic and Barclays tend to benefit more especially in areas of trade finance due to their wide network across globe.
Non-Performing Loans in Billions
|Banks||NPL in bns 2018||NPL 2017|
|Bank of Baroda||16||35|
Net profits in Billions
|Banks||Profits in bns 2018||2017|
|Standard Chartered Bank||96||93|
|Bank of Baroda||73||49.3|
|Brac Uganda Bank Ltd||17.2||21.5|
|Finance Trust Bank||5.58||2.36|
|Tropical Bank||5.78bn (loss)||5.52bn (loss)|