17 April 2012

Uganda: Barclays Bank Profits Jump to Shs 21 Billion

Barclays Bank Uganda ltd has registered profit of Shs 21billion for the year ended December 31, 2011 up from Shs9 billion in 2010, according to the bank's financial statement released on April 16.

According to the statement, profit before tax grew by 134% from Shs 10.7 billion in 2010 to Shs 25.1billion 2011. Operating income increased by 12% from Shs 129 billion in 2010 to Shs 145billion in 2011. Total assets grew by 6% compared to a year earlier.

The bank maintained a good credit profile through prudent risk management and realized a better performance in its overall impairment which reduced by 33%, the statement added.

The bank's good performance was also attributed to free ATM services extended to its customers, the establishment of premier banking suites in some branches among others.

The bank's Impairment losses on loans and advances fell 33 percent to 14.1 billion shillings. Customer deposits climbed 2.2 percent to 906 billion shillings, according to the statement. Net interest income, the money banks earn from interest charges on loans, rose 9.8 percent to 86.4 billion shillings.

The Bank's managing director Charles Ongwae told The Independent that the bank never changed interest rates charged on old loans in a bid to help the bank's borrowers get through the hard economic times which the country is still facing.

Most commercial banks increased interest rates charged on variable loans in line with Bank of Uganda's lending rates. Bank of Uganda raised its central bank rate from 13% in July last year to 23% in January, 2012 with the aim to curb bank credit and fight inflation.

As a result, commercial banks raised their prime lending rates from an average of 20% to over 30% something that forced traders to strike arguing that their businesses were shutting down.

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