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Uganda’s banking sector is dynamic, with a mix of traditional and modern financial institutions. The traditional banks have automated a few processes especially core banking (including integration to mobile and internet banking) and other essential processes like finance and human resources in a siloed way. The modern ones have an end-to-end smart bank agenda with a holistic approach to bank-wide automation in a structured way.

Published annually, the summitBI Bank Report offers the best of our insights into Uganda’s banking sector since 2016. With insights informed by data from publically published financial statements of banks, we provide miles-deep analysis to leaders to support them in transforming their operations and competing favourably in the market.  The top three challenges affecting bank leaders in Uganda are (a) regulatory Compliance and Risk Management; Cybersecurity risks and non-performing loans. To receive a copy of the summitBI 2024 Report, click here https://www.summitcl.com/bankingreport-2024/

Compliance with an increasingly complex and stringent regulatory environment is a big challenge. Banks must navigate a multitude of regulations governing new Bank of Uganda capital adequacy requirements, anti-money laundering (AML), know-your-customer (KYC), data privacy, and cybersecurity. Moreover, managing various types of risks, including credit, market, operational, and compliance risks, is essential for maintaining financial stability and regulatory compliance.  The new minimum capital requirements by the Bank of Uganda have disrupted banking and we anticipate more mergers, acquisitions and forced takeovers.

With the increasing digitization of financial services, bank leaders must prioritize cybersecurity to protect sensitive customer data and prevent cyber-attacks. Developing robust cybersecurity measures, investing in advanced technologies, and providing staff training are crucial for mitigating cybersecurity risks.

Third, but not least, managing non-performing loans remains a significant challenge for banks in Uganda. Economic uncertainties, borrower defaults, and inadequate credit risk assessment processes have led to high NPL ratios, negatively impacting the bank’s financial health and stability. Effective risk management strategies, especially credit scorecards and automated loan modelling for predictive analysis to increase loan recovery rate are essential to address this challenge.

In the 2024 State of Banking report, we will dig deep with data and insights to demonstrate how some financial institutions are addressing the challenges.

The #summitBIUganda’sStateofBanking Report theme is Resilience, Innovation and Inclusion.

We can now raise our heads and say, the COVID-19 pandemic crisis is in the rearview mirror. We do not expect a repeat of what happened in 2020 and 2021. The world is more prepared and resilient now.  While some banks withstood and rode out the storm, others are drowning in the aftereffects of the pandemic. To survive, they must ride on innovation beyond the conventional banking models.  In the 2024 special edition of the #summitBI Uganda’s State of Banking Report, we explore the new developments driving the banking sector and how winning banks are responding to grow their market share in the competitive landscape. You cannot cheat the market and survive, re EFC!

The Bank of Uganda rolled out the implementation of the capital increase requirement. Commercial banks are required to maintain a minimum paid-up capital of UGX 120 billion, and credit institutions of UGX 20 billion by 31 December 2022. These capital thresholds will be further raised to UGX 150 billion for commercial banks and UGX 25 billion for credit institutions by 30 June 2024. These ever-changing regulatory changes are a threat to many institutions, and we anticipate more mergers as many investors have a low appetite for additional equity injection to raise the minimum required regulatory capital. This begs the question: will the undercapitalized banks survive? The liquidation of EFC Uganda sets tough precedence for aspiring micro finances to join the Tier 2 category. Opportunity Bank has rejoined the Tier 2 category, a few years after being given a Tier 1 license by the Bank of Uganda. Are mergers and acquisitions in the pipeline?

Escalation on key banking parameters went to burst. In 2022, non-performing loans amounted to UGX1,230,068 trillion, an 8% increment from 2021. Equity Bank Uganda registered a 252.5% increment in non-performing loans which ultimately affected the bank’s profitability, dropping by 46% to UGX 45,752 billion.  Banks are under pressure to deliver profits. Our analysis shows that many banks are increasing their portfolio in securities at the expense of private-sector lending. As fintechs find their space in the market, we believe that the future of banking will belong to those banks that are using data analytics to inform their automation agenda.

The 2024 banking report will offer a comprehensive analysis of banking in Uganda. You will find the leading banks on the key parameters of assets, revenue, profit after tax, deposits, capital requirements, nonperforming loans and the insights you need to transform your bank. This is the most comprehensive writeup you will read in 2024 about the state of banking in Uganda with practical insights to win. We will explore the CASA deposit growth strategy. Modern credit risk scoring and management. Key indicators of bank health and soundness. Fraud in banking and more.

  1. To be among the first to receive a free copy of the #summitBI Uganda’s State of BankingReport24, take this survey and remember providing a valid email address so that you may be contacted.
  2. To get editable MS Excel banking data, graphs and charts for the past three (3) years or more as per your needs and save your team time in collecting the raw data, contact us here
  3. For an independent briefing to your EXCO and board on the future of banking; with a customized slide deck and specific issues of your interest in strategy relevant to your institution analyzed against the top 10 peer banks, contact us here for a special briefing.

For quality analysis, we usually accept requests from only 10 banks for EXCO and board briefing, book us early. To receive a copy of the summitBI 2024 Report, click here https://www.summitcl.com/bankingreport-2024/

Copyright Mr. Strategy of Summit Consulting Ltd. 2024. All rights reserved.

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