NCBA Bank net profit hits Shs27bn

Corporate banker NCBA Bank Uganda has announced its financial results for the fiscal year 2023, indicating a 17 percent net profit increase to Shs27 billion.

The results showcase a robust growth and profitability driven by strategic investments in a strong performance culture.

According to the results, net profit increased to 27 billion from previous year's performance of Shs23 billion.

The bank attributes the growth to a surge in customer deposits, which rose to Shs567 billion from Shs491 billion in the preceding year.

Commenting on the financial results, Patrick Muyobo, the bank’s Chief Executive Officer, attributed the performance to NCBA’s strategic focus on fostering a high-performance culture and leveraging the performance of its digital lending arm, Mokash.

Muyobo emphasised the bank's commitment to enhancing financial inclusion in Uganda by providing access to short-term credit and savings platforms to over 10 million clients through Mokash.

“Through our digital lending business of Mokash we have elevated financial inclusion in the Ugandan market through easing access to short-term credit to the unbanked and providing a savings platform for over 10 million of our clients,” Muyobo said.

The bank witnessed notable growth, with total assets increasing by 9 percent to Shs854 billion from Shs741 billion in the previous fiscal year.

Total equity recorded a remarkable 29 percent jump, reaching an impressive figure.

Additionally, gross loans and advances grew by 8 percent, reaching Shs242 billion.

On the income side, the bank demonstrated healthy growth, with total income increasing from Shs100 billion to Shs114 billion, representing a robust 14 percent increase.

Additionally, the bank managed to reduce impairments by an impressive 56 percent, from Shs7 billion to Shs4 billion.

Operational costs were also effectively managed, with a 6 percent reduction from Shs48 billion in 2022 to Shs48 billion in 2023, contributing to the bank's overall profitability.

Muyobo highlighted NCBA's resilience and adaptability in navigating market challenges, as evidenced by the bank's year-on-year growth in total income of 16 percent, profit before tax increasing by 46 percent, and net profit after tax rising by 19 percent.

Looking ahead, Muyobo reaffirmed NCBA's commitment to delivering on strategic business priorities, leveraging its digital capabilities, and maintaining a customer-centric approach.

“With a solid financial foundation and a culture of innovation, NCBA Bank Uganda is poised to capitalize on emerging opportunities and drive sustainable growth in the market,” he said.

It's worth highlighting that in the previous year, the NCBA Group infused Shs22.6 billion into its Ugandan subsidiary.

This contribution was part of a larger investment totaling Shs155.83 billion, which the Kenyan institution allocated across its subsidiaries in Uganda, Rwanda, and Tanzania. The objective was to fortify its regional retail banking business.

It is also worth noting that economic activity and business prospects in Uganda have shown signs of improvement, buoyed by increased output in the agriculture, services, and industry sectors.

In April 2023, annual headline inflation dropped to 8.0 percent from 3.3 percent in March 2024, driven by decreases in the prices of food, fuel, electricity, and other consumer goods.

As of April this year, the total outstanding private sector credit had expanded by 1.5 percent to Shs21.7 trillion, up from Shs20.3 trillion during the same period, the previous year.

This growth was fueled by increased demand for credit, as borrowers became more optimistic about declining interest rates in anticipation of accommodative monetary policy and economic recovery.

According to Muyobo, the bank will also increase its drive for sustainability reporting, with several investments in the green space lined up for the current 2024 financial year.