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Barclays committed
Meanwhile, Barclays Managing Director Rakesh Jha Jha also says the bank’s increase in investment costs demonstrates its commitment to improve its services and enhance customer experience. He said the plan is to continue to invest in new digital channels and improve existing ones to provide a better customer experience and attract new ones as part of the financial inclusion agenda. Barclays Bank registered 18% growth in customer deposits to Shs1.4trillion in 2016.
“”The introduction of services like cardless deposits at our ATM’s, 34 intelligent ATM’s, mobile wallet, universal bill payments, and CHIP and PIN debit and credit cards and other enhancements have eased our customer’s banking experience,” he said.
“With our branches providing 90% paperless banking, customers no longer need to complete transaction slips when making over the counter cash and cheque deposits or withdrawals.”
The bank also registered a reduction in NPLs from Shs95.6billion to Shs70.48bn while its bad debts written off its balance sheet increased by Shs3.6billion to Shs16.62billion during the same period under review.
Analysts also agree that the slow growth in profitability of the two banks should not be cause for anxiety as they are attributed to increases in operational costs expected in institutions undertaking heavy investments expansion and technology as they strive to tap into digital banking.
“At the moment, some of the leading banks such as Stanbic Bank and DFCU have already invested in their banking systems including mobile banking while these two other banks are simply trying to catch-up,” says Salma Nakiboneka, an investment analyst at STANLIB Uganda.
She predicts that once the investments; especially in technology which appears to be the future of banking is completed, they will again return to their normal profitability curve.
She said mobile banking is a new but profitable solution that commercial banks cannot ignore given the high number of mobile money users compared with the banked population in the country.
Adoption of mobile money services has been growing much faster than traditional banking. The latest World Bank Economic update released in February this year shows that up to eight million adult Ugandans now hold a bank account, a figure which pushes the share of the adult population with access to financial services to 52% up from 44% in 2014; 20% in 2011 and 28% in 2009.
On the other hand, according to Central Bank figures, mobile money users stood at 21.1million as at the end of 2015 since the service was unveiled just eight years ago.
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