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5% drop to Shs68bn in net profit
Kampala, Uganda | JULIUS BUSINGE | Huge taxes paid to Uganda Revenue Authority (URA) has seen Barclays Bank Uganda Limited record a 5% drop in net profit to Shs68bn for the year ended December 2018.
Barclays bank financial results released on April 25 show that revenue tax nearly doubled from Shs 14.8bn to Shs 28.8bn during the period under review citing changes in the treatment of tax law provisions.
However, the bank recorded an increase in income from Shs304bn in 2017 to Shs339bn in 2018. This was equally matched with an increase in operating expenses from Shs 125bn to Shs 139bn during the period under review, signaling the need for the lender to devise means to cut expenses.
On a positive note, the bank recorded an increase in interest on loans and advances – the core business of the bank – from Shs131bn in 2017 to Shs144bn in 2018.
Further, its assets went up from Shs2.4tn in 2017 to Shs2.7tn in 2018 – comfortably cementing it in the top five largest commercial banks in Uganda. But its liabilities slightly increased from Shs2tn in 2017 to Shs2.3tn.
The other area that managers have to cautiously deal with is the large loan exposures (large loans offered to single persons) that the bank recorded at Shs663bn in 2018, up from Shs415bn in 2017.
This is critical because failure by these few individuals to pay back loans on time would negatively impact the bank’s capital levels – a situation that led to the closure of some banks in the recent past.
During the year, the bank registered 520 bank agents and plans to increase them to 1,000 by end of 2019. This is in addition to diversifying its product offering to offer insurance products under bancassurance, according to the Bank’s Executive Director and Chief Finance Officer, Michael Segwaya.
Segwaya told The Independent that the strong performance of Barclays means that it will continue to excel in extending its services to the customers
On the digital front, Segwaya said they have provided agency and mobile banking that is facilitating payment for utility bills for their customers.
“The world is getting interconnected and we are working to ensure we provide convenience to our customers,” he added.
Tremendous performance
Segwaya said the customer deposits that grew by 6% was as a result of customers appreciating changes that were coming onboard regarding rebranding. The bank is expected to be rebranded from Barclays to Absa soon.
The bank also excelled in the area of non-performing loans that dropped from Shs106bn in 2017 to Shs53bn in 2018.
Going forward, Segwaya said 2019 started off well as they are seeing more growth in the bank’s balance sheet. They are also seeing more customers taking on more channels, more agents opening up, and more transactions being recorded.
The bank is also gearing up for some of the changes that will be coming through as a result of changes in the brand.
“…and we are preparing our customers for that,” he said.
The bank’s Managing Director, Rakesh Jha described 2018 as a good year for the bank. “We saw solid growth on the balance sheet, coupled with growth in income. We managed our costs very well and the portfolio quality has improved giving rise to very strong earnings for the bank,” Jha said.
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