Stanbic Bank Uganda has been named among commercial banks that have maintained the lending rates below industry average in the first six months of the year according to the Bank of Uganda’s monetary report for August 2020.
Stanbic Bank, Absa bank, Baroda, Bank of India, Citibank, Ecobank, NC Bank Standard Chartered Bank, United Bank of Africa, and Exim Bank are listed as having charged borrowers lowest rates between January and June 2020, effectively making them the cheapest lenders for borrowers to run to.
According to BoU, the industry average lending rates in June 2020 was 17.2% having dropped from 20.06% in January same year. Stanbic bank’s prime lending rate stood at 16% as of august 1st having reduced it from 16.5% that it charged in May 2020. Citi Bank had the lowest charges at 15% although it does not offer loans to individual customers.
Accordingly, Banks with the lowest Bank rates had the best performing loans. In the annual performance review, StanbiC Banks Customer Loan grow by 14% from Shs 2.5 trillion in 2018 to Shs 2.9 trillion in 2019. The bank also grew its deposits by 21% from 3.9 trillion in 2018 to 4.7 trillion in 2019.
“As more customers trusted us with their money and our loans and advances grew by 14% by availing Ush 344 billion of new credit to key sectors of the economy such as manufacturing, agriculture and personal lending where we provided more than 40% of new lending. Our revenues grew 20% year-on-year to exceed Ushs 800 billion and were well diversified between lending and non-lending revenue. As a result, our profit after tax grew 20% to a record Ushs 259 billion over Ushs 215 billion posted in 2018, noted Patrick Mweheire, the former MD of Stanbic Bank while commenting about last year’s performance.
Mweheire further explained that the Bank was able to offer more value to its customers because of the technological innovations that it has put in place that has cut the bank’s operational costs while improving its effectiveness in service delivery.
“Due to our obsession with the client, we are consistently innovating to enhance their experience. In 2019, we delivered on several customer initiatives such as online account opening, mobile lending, enhanced agent banking; cash deposit machines which remain available 24/7. We also massively invested in technology by further enhancing our core banking system and several other peripheral systems such as internet banking and business on-line banking. As a result, over 85% of all the bank’s transactions are now executed digitally – branches are less than 15% from 40% less than 3 years ago. All of this digitization has allowed us to put banking back into the hands of the customer wherever and whenever they want. With an excess of 1,700 active agents across the country, agent banking has demystified the brick and mortar preposition and created a win-win for the banks and clients,” he noted.