Absa Bank Uganda has announced a profit after tax of Shs 110 billion for the year ended December 2021, representing a 169 per cent growth in profitability from the previous year.
“Despite a tough operating environment, economic recovery was faster than anticipated evidenced by the remarkably resilient performance and expansion of the economy by an estimated 5.3 per cent. Private sector business growth was underpinned by a rebound in activity in agriculture, construction, and public administration. We registered a significant drop in impairment of 77.8 per cent as a result of increased improvement in the construct of our loan book indicating a faster than anticipated recovery from the adverse economic impact of the various Covid-19 containment measures,” said Mumba Kalifungwa, Managing Director, Absa Bank Uganda.
The bank also delivered 15.4 per cent growth in revenue to Shs 365 billion indicating a Shs 21 billion growth from 2020 attributed to sustained customer deposit performance throughout the year, coupled with market liquidity.
“Our net customer assets stand at Shs 1.3 trillion, marginally up by 0.1 per cent which can be attributed to weak credit demand caused by the adverse effects of the pandemic. We continued to extend financing to key sectors that drive the economy including manufacturing, trade and agriculture. Considering the full reopening of the economy and projected economic growth of 5.5 per cent for 2022, we expect a rebound in business activity across all sectors and anticipate that we will lend more to the private sector,” Michael Segwaya, Executive Director and CFO said.
The bank’s customer deposits grew by 2.7 per cent to Shs 2.421 trillion, maintaining a 10.6 per cent cumulative annual growth rate for the third year running. There was also a 21.6 per cent rise in total equity from 2020.
“We managed to grow our customer deposits despite a challenging year reflecting increased customer trust in the Absa brand. Our position in the market is stronger and we are even better poised to support economic growth across all key sectors as the economy expands. We are well capitalized with our total capital ratio at 24.3 per cent, well above the 15 per cent regulatory limit,” Mumba added.
Total costs remained flat year-on-year as a result of improved cost management and reduction in brand separation costs.
“Our commitment to be a strong force for good is unwavering as we look to deliver shared value within the communities that we operate. Our people are our greatest asset and we invested significantly in human capital development and enhanced staff productivity to drive business growth. Whereas our costs went up, they remain under control and in-line with inflation,” Mumba stated.
Absa Uganda intends to continue to leverage digital technology to deliver seamless customer experiences and drive business growth as innovation remains key to the realization of its ambition to be a digitally led bank.
“We remain cautiously optimistic in our outlook for 2022. Full reopening bodes well for economic rebound and monetary policy remains supportive of the recovery of the economy. We remain committed to providing,” he said.