Stanbic bank’s performance, though, is expected to be better than most of its industry peers.

Patrick Mweheire, the chief executive, Stanbic Uganda Holdings Limited (SUHL), to which SBU is a subsidiary, said, “Despite a challenging first half, Stanbic Uganda has demonstrated resilience as highlighted by the first six months’ performance. We have also made significant strides towards achieving the strategic objectives as set out in 2018 of creating the opportunity for Stanbic to venture into other non-banking services that would enhance value of products and services provided to our different stakeholders and ultimately increased shareholder value.”

Uganda’s banking industry is expected to suffer in 2020 as bad loans go up due to the effects of the coronavirus, with cases spiking in recent days.

Stanbic bank set aside up to Shs 39 billion as impairment charges for bad loans for the period under review, up from Shs 14.3 billion in the first six months of 2019.

Although Bank of Uganda has lowered the central bank rate – a key monetary tool that influences interest rates in the market – many businesses are not borrowing as much. Nevertheless, Stanbic’s loans and advances to customers grew by 26 per cent to Shs 3.4 trillion, from Shs 2.7 trillion in June 2019. 

There was, however, a big drop in the loans and advances to other banks. In April, Bank of Uganda released a list of measures to protect the financial industry from defaults. While emphasizing that the credit relief measures “do not eliminate the debtor’s obligation to repay borrowed funds,” Bank of Uganda urged banks to consider “repayment holidays for a maximum of 12 months, loan tenor extensions, and any other forms of debt restructuring covered in existing regulations.”

Stanbic bank said it “offered credit relief programmes to business and personal customers to minimise the impact the pandemic would have on their businesses. We also waived all charges on our digital banking platforms so that customers transacted free of charge.”

These measures appeared to have created some bit of relief to customers. The bank said that customer deposits increased by 26.8 per cent to Shs 5.2 trillion in June 2020, from Shs 4.1 trillion in June 2019.  

Stanbic has proposed to issue out Shs 110 billion in dividends to its shareholders. Stanbic bank’s share price at the Uganda Securities Exchange is trading at Shs 24, just four shillings above its price at the Initial Public Offer 14 years ago.