Banks have reported growth in total assets for the twelve-month period ending June 2023, although lending to the private sector remained thin according to a report from Bank of Uganda (BOU).

According to the latest sector report, total bank assets surged by 8.4%, climbing from sh44.6 trillion as of June 2022 to sh48.3 trillion by June 2023.

Michael Atingi-Ego, the BOU deputy governor, said “despite inflation and geopolitical tensions, the Ugandan banking sector remained resilient” during the period.  

However, the primary driver behind the growth figures was supported by commercial banks investment in holding government securities, which expanded by nearly 12.2% during the review period, data from BOU shows.

“The increase in banks’ assets was mainly attributed to holdings of government of Uganda securities, which rose by 12.2%, amidst a slowdown in credit growth,” BOU said in its report.

“Concerns about slowing economic growth induced greater caution in banks towards extending loans to the private sector. In this regard, commercial banks’ gross loans and advances increased by 4.7% from sh18.6 trillion in June 2022 to sh19.4 trillion in June 2023. This was considerably lower than the 12.2% growth posted in the previous year. Nevertheless, the growth observed this year was boosted by net extensions that amounted to sh635b within the period leading to June 2023.”