Kampala — POSTBANK revenues climbed to sh17.5b despite a tough year for the financial services sector, writes Vision Reporter.
The bank said the growth was fuelled by footprint expansion and product innovation. Releasing the financial results last week, Stephen Mukweli, the managing director, pointed out that 2009 witnessed remarkable improvements in customer deposits, which surged by 25%, up from sh50.5b in 2008 to sh63.3b.
"This was a result of our prudent investment in new branches and innovative ways to reach the unbanked. This boosted our lending power, pushing up our loan book by 53.5% from sh25.4b in 2008 to sh39b in 2009," he said. Due to increased lending, total operating income grew by 19% from sh14.7b to sh17.5b, driven mainly by interest incomes that went up by 25.2% from sh8.4b to sh10.5b. Increased lending also gave the bank's asset book, a 19% boost. Total assets grew from sh65.3b to sh77.6b.
However, branch expansion drove expenditure up, impacting on profits. The bank reported a loss of sh167m after total operating expenses rose by 30% to sh17.5b.
"Out of the 29 branches at the end of the year, seven were new and this meant that 25% of our business was just starting up. This loss was foreseen and accepted as a worthy prize," Mukweli said.
for investing in the future and the convenience of our customers," explained Mukweli.With this network, we have created both a strong foundation for future growth but also reached out to more unbanked populations," he said.
On the outlook, Mukweli said despite stronger competition in 2010, Postbank would return to full profitability.