Mathias Katamba, the dfcu CEO has been elected the new Chairman Uganda Bankers Association (UBA) to replace Patrick Mweheire, who recently left the position of CEO Stanbic bank. Katamba previously served as Vice Chairman at UBA. Despite restrictions caused by the Cvoid-19 pandemic, UBA members were able to hold their annual general meeting on the 22nd May 2020 and held elections.
Other members elected on the executive committee of UBA include; Sarah Arapta, Citibank CEO as Vice-Chair, Varghese Thambi, CEO Diamond Trust Bank as Honorary Treasurer, Sam Ntulume, CEO NC Bank as Honorary Auditor, Albert Saltson, CEO Standard Chartered Bank, Committee Member and Veronica Namagembe, CEO Pride Microfinance (MDI), Committee Member.
The new leadership assumes responsibility at a time when the industry has registered significant improvements in the areas of profitability, credit extension, channels and growth in assets over the past year 2019.
In his last message as Chairman of UBA, Patrick Mweheire noted that in 2019, two financial institutions namely Opportunity Bank and Afriland Bank were issued with commercial banking licenses bringing the total number of tier I banks to 26.
He pointed out that total assets of the banking industry had increased by 16.7% from sh28.1 trillion at end of December 2018 to sh32.8 trillion as at December 2019. This growth was attributed to growth in loans and advances by 13.9% from sh12.7 trillion reported in 2018 to sh14.46 trillion in 2019.
In the year 2019, the banking industry registered a growth in loans/ credit facilities spread across most sectors with Real Estate and Construction accounting for 20.2 % of the total industry loan book, followed closely by trade & commerce at 19.2% personal and household loans at 18.4%, followed by agriculture and manufacturing at 13.5% and 12.8 % respectively.
Lending to agriculture registered the highest annual growth rate of 18.1% (sh298b) largely attributed to lending extended in the areas of agro-processing (sh219.2b). Growth in customer deposits by 18.4% from sh19.6 trillion in December 2018 to sh23.2 trillion in December 2019.
Shillings deposits stood at sh14.2 trillion (62.8%) while FX deposits were recorded at sh8.7 trillion (37.2%). Growth in total number of accounts recorded at 15,423,426 as at December 2019 compared to 12,172,484 as at December 2018 representing a growth of 21%.
Growth of access channels, specifically agent banking points across the country increased to 12,154 by end of December 2019. In the previous years, the industry operated less than 800 branches and 1,000 ATMs across the country with high costs incurred in maintenance of these channels.
Aggregate cost to income ratio improved from 73.9% in 2018 to 61.4% in 2019. Eight banks however made losses in 2019 largely brought about by more provisioning for non-performing loans.
Mweheire noted that the cornerstone of the industry's medium-term (2019-2021) strategy remains leveraging ICT for digital financial services to increase access to and drive initiatives to lower the cost of delivering financial services.
He reported that the association spearheaded the project to build infrastructure to enable member financial institutions gain access to the national identity and registration authority (NIRA) database for purposes of verification of identity and authentication of transactions which project is expected to go live this year 2020.
He pointed out that a joint UBA-Bank of Uganda taskforce was put in place to work with consultants engaged with the assistance of FSDU to work through the necessary regulation to support industry growth.
In order to reduce case backlog and to free up capital tied up in litigation cases, UBA in collaboration with the Uganda Law Society and other stakeholders championed the establishment of a private sector-led arbitration center (the International Center for Arbitration & Mediation in Kampala (ICAMEK).
Mweheire said that the industry had to date responded to Government's call and contributed a combined sum of sh2.8b by way of cash, PPE and various forms of support towards the fight against effects of COVID-19.