ABC Bank reports profits after Tier II transition

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ABC Capital Bank reports strong profitability with net profit jumping 285% to sh520m in 2025 following its transition from a Tier I commercial bank to Tier II status during the year in review.

The lender's bottom line in 2024 was sh135m. The continued rebound follows a nearly sh515m loss position reported in 2023. In March, Bank of Uganda announced the transition of three commercial banks, including ABC Bank, Guaranty Trust Bank and Opportunity Bank, which opted to downgrade their licenses from being tier I to tier II credit institutions.

The Bank’s total revenues improved during the year from sh7.9b to sh8.5b. Total assets grew modestly to sh60.8b from sh59.2b, while net loans and advances to customers rose to sh21.2b from sh20.7b.

However, customer deposits fell to sh23b from sh25.7b the previous year. Analysts often link such deposit declines during a Tier I to Tier II transition to the loss of certain corporate and current account products that Tier II credit institutions are restricted from offering.

The shift, which took effect in July 2024, typically involves phasing out cheque-bearing current accounts and some foreign exchange-related deposit products that require a full commercial banking license.

In a statement, Christopher Kabagambe, executive director at ABC, said the numbers reflect steady execution on the bank's recovery plan.

“This performance demonstrates the strength of our recovery path and the deliberate choices we have made to reposition the Bank for sustainable growth. We are seeing the impact of focused execution, stronger governance and a clear commitment to innovation,” Kabagambe said.

“Our focus on digital transformation and product diversification is not only improving efficiency but also expanding access to financial services for our customers. We remain committed to building a more resilient and future-ready institution,” he said. 

The Bank of Uganda increased the minimum paid-up capital requirements for commercial banks from sh25b to sh150b, credit institutions from sh1b to sh25b, and microfinance deposit-taking institutions from sh500m to sh10b.