Innovation, largely driven by investments in financial technologies, coupled with prudent credit management, enabled Centenary Bank to fend off a tough 2021 to not only remain growing but reach record highs in its 39-year history.
While prolonged lockdowns significantly affected the education sector- one of the bank’s major sources of vital customer deposits, the bank, literally banked on its prior investments into a vast agency banking network as well as CenteMobile, its mobile banking platform, to keep deposits growing- albeit slower than usual.
Moderate growth in deposits, from Shs3.137 trillion in 2020 to Shs3.181 trillion in 2021 (a 1.4 per cent increase) together with a growing loan book, helped to bolster the bank’s earnings, allowing it to set new record highs, on all key fundamentals.
In results announced today, the bank reported that even amidst a tight economy, its lending purses were open in 2021, and it lent out Shs318.8 billion more than it did in 2020. The bank’s loan book at the end of 2021 was Shs2.277 trillion, compared to Shs1.958 trillion- an increase of 16.3 per cent.
As a result, total income grew by 19.9 per cent from Shs 720.5 billion in 2020 to Shs 864.0 billion in 2021.
This was largely driven by a 17 per cent rise in earnings from interest on loans and advances (Shs428.2 billion to Shs500.7 billion); an 18 per cent rise in interest earnings from investment securities, (Shs78 billion to Shs92 billion), as well as a 43 per cent rise in fee and commission income from Shs130.4 billion to Shs187.1 billion.
As a result, profit after tax increased from Shs 161.2 billion in 2020 to Shs 211.5 billion in 2021 registering an increase of 31.2 per cent.
The 2021 performance is the bank’s record highest in the bank’s 29-year history. This also comfortably seals the bank’s position as the second-biggest bank by deposits, lending assets and profitability.
However, Centenary Bank is the largest indigenously majority-owned bank—the Registered Trustees of the 19 Catholic Dioceses in Uganda own 41 per cent of the bank, while The Registered Trustees of the Uganda Episcopal Conference, own 31.7 per cent. Other major shareholders are: Solidarite Internationale pour le Development et l’Investissement (SIDI) 10.5% and Triodos Sicav II-Triodos Microfinance Fund (7.5%) and Triodos Custody BV (7.5%).
Facts Behind the Figures
In a media commentary accompanying the results, Fabian Kasi, the Managing Director of the bank attributed the firm growth to a “resolve in continuously delivering value to our customers and all stakeholders.
“We leveraged technology, people and good relationships, to deliver good performance, despite the year’s challenging operating environment,” he said, referring largely to the COVID-19 pandemic which was prevalent during the first half of 2021 and the economic and social lockdown which followed.
“The registered growth in 2021 in profits and total assets amidst slackness in the Economy reflects our customer-centric value proposition delivery. This was guided by the Bank’s Strategy, supported by investment in technology, lean processes and Risk Management,” he added.
Digital Advancements, Widening Agent Banking Network and Innovations
Fabian, said that in 2021, the bank had revamped its CenteMobile, and its mobile banking proposition, adding to it the CenteOnTheGo function, a self-service solution which enables customers to open savings accounts for themselves anywhere through a less tedious process with minimum requirements. Other additions to the CenteMobile platform include a service for direct data purchase for MTN customers, as well as fundraising and collection services, that allows customers to make direct contributions to registered causes for organizations, associations, churches, and communities.
“Centenary Bank is leading on Mobile banking connections, at 41.6% of industry connections. We closed the year with over a quarter of customer transactions being carried out on the mobile banking platform i.e., CenteMobile,” revealed Fabian. `
Fabian said the bank had introduced CenteMobile enabled withdraws via Cente Agents as well as Digital Access for the elderly receiving funds from the Government of Uganda’s Social Assistance Grant for Empowerment (SAGE) program. Funds can easily be accessed by the elderly, through any of Centenary Bank’s 5,500 agents around the country. Agent Banking.
On the Agent Banking platform, he said, Visa Cardholders were now able to withdraw cash, check balances and mini statements via banking agents. Customers are also now able to deposit cash on their Pre-Paid Visa card.
“Centenary Bank is leading on Agent Banking with 42.3% of the agents in the industry. We closed the year with a third of customer transactions being carried out through agent banking,” Fabian reiterated.
On the cards front, Centenary Bank, in 2021 introduced the Mastercard Platinum Card to further enable high-network customers to enjoy local and international transactions as well as e-commerce inclusive services.
He said the bank controls 31.5% of the Mastercard Platinum Cards on the market.
Increased footprint, innovations, social investments and peer recognition
Fabian also said that the bank had expanded its branch and ATM spread, closing 2021 with 77 branches.
“In 2022, we added 3 more branches in Gayaza, Kabwohe and Kihihi bringing the total to 80 Branches. The number of ATMs has also grown from 188 to 191,” he intimated.
He also said that reaching out to the underserved remains fundamental to Centenary Bank.
“In 2021, we increased the number of youths, women, refugees and customers in the rural areas. The youth increased by 15%, women by 21% and customers in rural areas by 19%; refugees by 23% and the number of accounts by 15%,” he said.
In 2021, Centenary bank, working together with Prudential Uganda, introduced the Diaspora Funeral Cover- a Funeral and Repatriation Insurance cover that provides financial support to the families living and working in the diaspora, in the event of the untimely demise of a customer.
The bank had also introduced the CenteYouth Loan, a special loan product that targets the youth with special benefits for youth in business.
“Our mandate to make banking a one-stop-shop remains. We’ve invested in research and made innovations in response to customer expectations and the changing times,” said Fabian.
All these innovations attracted a number of industry and peer accolades such as The Financial Reporting Awards 2021 where the bank was honoured with 3 accolades, namely: Silver Award – Integrated Report of the Year; Winner of the Presentation & Communication Award as well as 2nd Runner Up – Commercial Banking Services category.
In the Digital Impact Awards Africa, the bank walked away with the Best Banking Innovation Excellence for the CenteOntheGo Service; Best Community / MFI Banking Innovation Excellence and Silver Award as the Digital Brand of the Year.
Brand Africa recognized the bank with two awards, namely: The Most Admired Ugandan Financial Services Brand and One of the most helpful brands during the COVID-19 pandemic.
Sustainability and the future
Fabian said that moving forward the bank would steady execution of its strategy, which focuses on innovation, digitization, managing risk, embracing change and sustainability will be key for our future.
“Our 2022 Strategic Objectives are focused on customer centricity, efficiency, process automation, sustainability, learning and growth. In the pursuit of the above, we are desirous to provide a nurturing environment for our employees to enhance their productivity,” he said.
“I extend my appreciation to all stakeholders for their confidence and trust bestowed in Centenary Bank. Thank you for being part of Our Bank in 2021. With our strategy, investment and relationship with you, we believe 2022 will be a better year,” he concluded.