Centenary Bank made a net profit of Shs100.3bn after tax in 2017, dropping 8.8% from the previous year’s Shs109.9bn.
Total expenses increased by 19.5% against income growth of 11%.
Total income in 2017 rose by Shs50.9bn to Shs514.8bn while total expenses rose by Shs61.4bn to Shs377.5bn. In comparison to 2016 when total income rose by Shs69.5bn and expenses increased by Shs58.6bn.
The bank spent 85.9% more in loan loss provisions, expense set aside for uncollected loans and loan payments. This was less than the 118% increase seen in 2016. The bank also spent Shs17.8bn more in employee benefits in 2017, 15.3% more than in 2016.
Other expenses also increased by 17.2% to Shs132.5bn, likely due to digitisation push and increased reach to customers. In their 2016 Annual Report, the bank expected to have “more technology related costs”, adding that the “new technology is expected to result into excellent customer service delivery.”
Centenary Bank employed about 2400 fulltime employees (as at close of December 2016) and has started spending more on their training. The bank has an e-learning platform known as click campus with over 500 courses in different banking areas. In 2016, the bank spent close to Shs4.1bn “as a way of ensuring that the staff have the right skills and knowledge to deliver the bank services.”
Interest income rose by 8%, with the bank gaining more from deposits and placements. Interest on deposits grew by 223.3% in 2017 to Shs 24.4bn from Shs7.5bn in 2016. There was gains on interest on government securities held for trading which increased to Shs11.5bn from Shs6.8bn in 2016. Income from government securities held to maturity reduced by 26.2% to Shs46.7bn from Shs63.3bn in 2016.
Non-interest income increased 21.9% from Shs98.7bn in 2016 to Shs120.3bn in 2017. This was faster than the previous year when it rose by 13.3% from 2015.
The Bank’s total assets grew by 16.9% to Shs2.7trillion, with strong growth in government securities and intangible assets. There was a 22.8% drop in property and equipment to Shs159.9bn from Shs207bn.
Customer deposits – which make up the bulk of the bank’s main sources of funding – increased by 17.5% to Shs1.9trillion from Shs1.6trillion. In 2016, deposits grew by 17.9% and in 2015, by 17.5%.
The bank wrote off Shs18bn in bad debts and reported a 74.6% increase in non-performing loans to Shs62bn from Shs35bn in 2016.
Various Catholic Dioceses in Uganda own 38.5% of the bank, the Uganda Episcopal Conference owns 31.3% while SIDI (International Solidarity for Development and Investment) has 11.6%. Other shareholders include Stichting Hivos – Triodos Fonds (18.3%) and four individuals (0.3%).