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Stanbic Bank Uganda reports 7% drop in first-half profit, hit by lockdown

08/21/2020 | 06:59am EST
Security guard stands at the entrance of the Stanbic Bank in Abidjan

Uganda's Stanbic Bank reported on Friday a 7.4% decline in half-year pretax profit, as one of the most sweeping lockdowns in Africa to curb the coronavirus hit its business.

The bank, a unit of South Africa's Standard Bank, said its profit fell to 169.2 billion shillings ($46 million) in the six months to the end of June, from 182.8 billion for the same period last year.

Uganda implemented one of Africa's strictest lockdowns to curb the coronavirus outbreak, including shutting down all businesses but the most essential across the country.

Authorities also stopped travel, closed schools and shut borders to all except cargo transport.

Stanbic's Chief Executive Anne Juuko, in a statement, said the bank had waived all charges on transactions on its digital banking platforms to help boost cashless transactions and potentially minimise coronavirus infection risk, a measure that hurt revenues.

Stanbic also "offered credit relief programmes to business and personal customers to minimise the impact the pandemic would have on their businesses."

In addition, the bank lowered its lending rates to ease pressure on existing customers while encouraging borrowers in a depressed economic environment.

The central Bank of Uganda has been putting pressure on commercial banks to slash lending rates to keep credit flowing to businesses battered by the effects of the coronavirus.

In July, the central bank threatened to cap commercial lending rates saying some banks had failed to reduce loan rates in response to cuts in benchmark rates.

The regulator has slashed its benchmark rate twice this year, taking it down to a record low 7%.

Juuko said the bank had recorded a 24% rise in the value of new loans in January-June, compared to the same period last year.

($1 = 3,667.0000 Ugandan shillings)

By Elias Biryabarema


© Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
DOW JONES AFRICA TITANS 50 INDEX 0.34% 513.64 Delayed Quote.-4.72%
STANDARD BANK GROUP LIMITED 0.37% 123.22 End-of-day quote.-26.79%
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