Absa Bank Uganda has announced a robust set of financial results for the year ended December 31, 2024, with its profit after tax rising by 22 per cent to Shs 178 billion from Shs 146 billion in 2023.
The bank further recorded a 15 per cent increase in its revenue from Shs 475 billion in 2023 to Shs 546 billion in 2024. According to Michael Segwaya, executive director and chief financial officer at Absa Bank Uganda, the total revenue growth was driven by increase demand for risk management products and increased lending to customers.
There was also a 21 per cent increase in non-funded income and 11 per cent growth in net-interest income. Of the Shs 546 billion in revenue, retail banking accounted for 32.5 per cent of the total revenue growth, business banking 15.7 per cent, corporate banking 25.3 per cent, markets 17.5 per cent and treasury 9.1 per cent.
“The bank’s strong revenue performance is a testament to our sound financial strategy and disciplined execution. We also saw an 11.5 per cent growth in customer liabilities and a 12.7 per cent increase in our loan book which closed the year at Shs 1.99 trillion reflecting a 15.1 per cent three-year cumulative average growth rate,” he said.
The lender’s net customer loans also grew by 12.7 per cent powered by robust uptake of trade loans, asset finance, mortgagees and credit cards with lending to the trading sector making up 26 per cent of the total loan portfolio, personal household loans grew to 27 per cent from 24 per cent in 2023 while agriculture and manufacturing accounted for 10 and 9 per cent respectively of the loan portfolio.
“Our lending strategy reflects our commitment to catalyzing Uganda’s real economy. The sustained growth in our loan book is not only a result of customer confidence but also our prudent risk management and sectoral focus,” Segwaya added.
David Wandera, interim managing director at Absa Bank Uganda, attributed the 2024 performance growth Uganda’s economy demonstrated remarkable resilience in 2024 with real GDP growth accelerating to an estimate of 6 percent up from 5.3 per cent the previous year driven by strong investment in the oil sector, favourable weather conditions and the roll out of the Parish Development Model (PDM).
He also noted that inflation was well managed averaging just about 4 percent, a record lowest in East Africa and the lowest across the continent after Mauritius, a fall in headline inflation from 4 percent in July to 2.9 per cent in November thanks to prudent monetary and fiscal policies and a relatively stable Uganda shilling supported by export inflows, remittances and a liquid interbank foreign exchange market.
“This macro economic stability put forward a foundation for us and our banking operations allowing us to extend credit and deliver inclusive financial services,” he said.
“Our accelerated revenue was growth driven by strong Net Fee Income performance and balance sheet momentum, balance sheet growth was driven by increased active customer base and working capital support to strategic sectors of the economy while the growth in profitability was driven by strong revenue growth and increased transactions.”
Looking ahead to 2025, the bank hopes to effectively balance innovation with regulatory compliance, addressing economic challenges and aligning with the ever evolving needs of its customers as well as enhance customer experience by leveraging digital innovation, providing platforms for greater customer convenience and future ready solutions.
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As the economic situation stands in this country, it is all about changing the guards. Barclays bank used to make lots of money on the continent of Africa without showing much in terms of helping to develop the poor African countries all the way to South Africa. It is no surprise that Absa, a well protected international investor, is now at it doing the same thing of making so much profits on the back of a very poor country like Uganda where the long serving African government is in deep financial debts internationally and nationally left, right and centre for now many years and counting!