Absa Bank Uganda Limited, formerly known as Barclays Bank of Uganda, returned to profit growth in 2019 on the back of stronger growth in lending income and a rebound in interest from trading securities.
Profits at the bank, which changed its name to Absa Bank Uganda Limited on 11 November 2019, fell 4.2% in 2018 to Shs68.9bn. Its financial statements for 2019, however, show that net profit rebounded during the year, increasing by 13.2% year on year to Shs78bn.
Profit growth was aided by stronger growth in interest from loans, which increased by 22.8% to Shs177.6bn compared to growth of 9.9% the previous year. Income from trading securities also rose by Shs5bn to Shs9.2bn, rebounding from a 52.7% decline in 2018.
The bank’s income rose 19.4% year on year to Shs404.9bn, up from growth of 11.4% in 2018. Interest earned from investment securities was Shs89.4bn, up 21.9%, while income from foreign exchange transactions rose 14.2% to Shs37.8bn. Income from fees and commissions came in at Shs69.8bn, increasing by 4.7% year on year.
Total loans grew 13.3% from the year before, to Shs1.3 trillion. Deposits from customers, on the other hand, rose 22% to Shs2.2 trillion.
Absa’s expenses were Shs307bn at the close of 2019, rising by 27.3% year on year. Operating expenses were reported at Shs165.2bn, rising 18.2% compared to an increase of 11% the previous year. Interest paid on customer deposits, on the other hand, increased to Shs52bn from Shs37.8bn, while management fees rose 34.7% to Shs40.9bn. Loan loss provisions were Shs12.2bn, up from Shs8.9bn in 2018.
Pre-tax income was flat at Shs97.8bn, while the bank’s income tax bill declined by 31.5% to Shs19.7bn.
Absa said it will pay Shs20bn in total dividends to shareholders, down from Shs30bn the previous year. The Johannesburg-listed Absa Group Limited owns a majority stake in the bank.