The lender posted a 20.4% rise in profit after tax to Shs 586.2 billion
In banking, consistency is often more valuable than bursts of brilliance. Stanbic Bank Uganda Limited appears to have mastered that art. The lender posted a 20.4% rise in profit after tax to Shs 586.2 billion for the year to December 2025, extending a run of dependable growth that reflects both a benign macroeconomic backdrop and a carefully diversified business model.
The numbers, at first glance, tell a familiar story. Total income rose by 12.5% to Shs 1.54 trillion, with interest income retaining its place as the bank's primary engine. Earnings from loans and advances climbed by 6.8% to Shs 688.5 billion, supported by a 16.2% expansion in the loan book to Shs 5.1 trillion. Yet beneath this lies a more nuanced shift: the growing importance of market-facing activities.
Income from trading and marketable securities surged by 48.4% to Shs 286 billion, one of the fastest-growing lines on the balance sheet. Returns on investment securities also rose by 12.4% to Shs 170.2 billion. Together, these suggest a bank increasingly adept at extracting value not only from lending but also from its treasury operations--a useful hedge in a market where credit demand can be cyclical.
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Non-interest income, often the mark of a maturing bank, also played its part. Net fees and commissions rose by 13% to Shs 236 billion, buoyed by higher transaction volumes and deeper client engagement. Other income nearly doubled to Shs 26.3 billion, underlining diversification efforts. Only foreign-exchange income disappointed, falling by 15.7% to Shs 94.1 billion--perhaps a casualty of a more stable shilling and narrower arbitrage opportunities.
Expenses too surged
If revenues were robust, costs were not idle. Total expenses rose by 12.3% to Shs 807.2 billion, reflecting both the price of growth and the realities of tighter liquidity. Interest paid on customer deposits jumped by 57.2% to Shs 103.9 billion, as deposits grew to Shs 8 trillion and competition for funding intensified. Borrowing costs also rose, albeit more modestly, by 14.3% to Shs 30.4 billion.
Operating expenses increased by 10.5% to Shs 612 billion, pointing to continued investment in technology, distribution and expansion--outlays that may weigh in the short term but are designed to sustain long-term competitiveness. Management fees edged up by 10.2% to Shs 42.2 billion.
Encouragingly, credit quality appears to have improved. Provisions for bad loans fell sharply by 45.2% to Shs 18.6 billion, even as the non-performing loan ratio ticked up slightly to 1.7% from 1.5%. This suggests that while some stress remains, the overall loan book is becoming more resilient--a crucial factor in an economy still exposed to external shocks.
Efficiency, the quiet metric of banking success, remained broadly stable. The cost-to-income ratio improved marginally to 47.1%, while return on equity rose to 26.8% from 24.3%. In other words, the bank is not only growing, but doing so profitably.
The broader context helps explain why. Uganda's economy expanded by 6.3% in 2025, up from 6.0% a year earlier, supported by easing monetary conditions and a modest revival in investor confidence. Inflation averaged a subdued 3.6%, while the central bank rate fell to 9.75%. Meanwhile, the Ugandan shilling strengthened to an average of Shs 3,600 against the dollar, aided by improved foreign-exchange inflows. For banks, such stability is fertile ground.
Within this environment, Stanbic's balance sheet expanded with purpose. Customer deposits rose by 13% to Shs 8 trillion, signalling sustained trust in the institution. Net loans and advances grew by 16.4% to Shs 5.1 trillion, driven in part by faster credit processing and disciplined risk management.
At the group level, Stanbic Uganda Holdings Limited reported similarly solid results, with shareholders set to receive Shs 360 billion in dividends. The payout underscores both confidence in future earnings and a commitment to rewarding investors--an important signal in a market where capital can be fickle.
Franchise CEO exit
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Leadership, too, is in transition. Francis Karuhanga, the outgoing franchise chief executive, exits on a high note, while Mumba Kalifungwa, in his first full year leading the banking subsidiary, inherits a business with momentum. "This performance reflects the collective effort of our people, the trust of our clients, and the strength of our partnerships," Kalifungwa observed, striking a note of cautious optimism.
The question, as ever, is sustainability. Much of Stanbic's recent success has been underpinned by favourable economic conditions and strong trading income--both of which can reverse. Rising funding costs, too, may yet squeeze margins if competition for deposits intensifies further.
But the bank's strategy--balancing lending with diversified income streams, investing in infrastructure while maintaining discipline on costs--appears sound. In an industry where volatility is the norm, such steadiness is no small achievement.
For now, Stanbic's ascent looks less like a sprint and more like a measured climb. In banking, that may be the surest route to the top.
