Africa Financial Services 

MONEY, PEOPLE & POWER: The 10 bank CEOs who control 80% of Uganda’s banking sector – CEO East Africa

1. Anne Juuko

Chief Executive, Stanbic Bank

2019 Asset Value: UGX6.6 trillion

Market Share: 20.2 per cent

Industry Rank: 1

Stanbic Bank has maintained the top spot in the banking sector ever since the acquisition of a majority stake (80per cent) in Uganda Commercial Bank (UCB) back in 2001. Getting to the top spot was the easy bit – despite the politics around the acquisition. Remaining at the top, ahead of the chasing pack is where all credit is due to the bank shareholders and management that have given the bank a sense of direction. In 2019, Stanbic Bank controlled 21 per cent of the entire commercial banking assets after its asset base grew by 23.3 per cent to UGX6.6trillion.

In the driving seat to continue driving that growth is Anne Juuko, the Chief Executive Officer (CEO). Juuko rose from being the Head of Global Markets for Uganda and in 2018 she was appointed Corporate and Investment Banking at Standard Bank, Namibia. On March 1, 2020, she started her new role as the Stanbic Bank Uganda CEO.

She is the first woman to lead the largest bank in Uganda and in her seat, she controls the largest loan book- UGX2.85 trillion or 20per cent of total industry lending. She also controls the largest deposits portfolio- UGX4.7 trillion or 20.3 per cent of the industry share.

By its size though, in absolute figures, Stanbic also has the highest figure for Non-Performing Loans (NPLs)- at UGX120billion. However, considering the size of their loan book, this only constitutes 4.3 per cent- below the banking average of 4.7 per cent as at the end of 2019.

Stanbic, has over the last 5 years pursued a technology-led cost reduction exercise, seeing cost-to-income ratios reduce from 56.4per cent in 2015, closing 2019 at 49per cent – much below the Uganda banking industry average of over 70per cent. And it appears with every step away from brick and mortar banking, Stanbic is getting leaner and meaner. Today, more than 85per cent of all the bank’s transactions are now executed digitally; branches only account for less than 15per cent from 40per cent just about 3 years ago. It is also no wonder that Stanbic’s Return on assets and return on equity in 2019 was 4.3 per cent and 25 per cent, against the industry’s 2.9 per cent and 16.8 per cent respectively.

With an NPL Ratio of 4.3per cent and a gross loan to deposits ratio of 62.9per cent (regulatory limit is 80per cent), barring the effects of Covid-19, the year 2020 will still be Stanbic’s year.

2. Fabian Kasi

Managing Director, Centenary Bank

Period in Charge: 9 Years, 11 Months

2019 Asset Value: UGX3.6 trillion

Market Share: 10.9 per cent

Industry Rank: 2

The second place in Uganda’s commercial banking always belonged to Standard Chartered Bank. However, that spot now belongs to Centenary Bank – the largest bank by number of customers – that has found a niche is volumes of micro-lending. In occupying second place, Centenary Bank controls 10.8 per cent (UGX3.6 trillion) of all commercial bank assets in Uganda. The asset rise in 2019 was driven by lending expansion of 13.5 per cent to UGX1.736 trillion which forms 12.2 per cent of the entire commercial banking loan book.

At the heart of this growth has been Fabian Kasi who has led the bank for the last 11 years, moving it from fourth place to now second place. Since 2010, Kasi has managed to focus the bank on growth whilst not losing its rooting in supporting small businesses. As a result, today Centenary Bank also controls 10.8 per cent of the total deposits of all commercial banks at UGX2.53 trillion

And Kasi has also proved that you can make money for the shareholder, while serving those at the bottom chain. In 2019, he registered a 44.4 per cent growth in after-tax profit for the bank- which was arguably the largest rise in the top 10 banks and the second-largest of all the 25 banks after United Bank for Africa’s after-tax profit which grew by 63 per cent. After-tax profit for Centenary Bank was UGX156 billion, making it one of only 3 banks – Stanbic and Standard Chartered being the other two – with profits of over UGX100 billion.

Notably, even with the second-largest loan book, Kasi and his team managed to keep NPLs at 3.5 per cent of their total loans; lower than the industry average. Kasi continues to lead Centenary Bank into the future with digital and agency banking widely expected to lead to lower costs of operations for banks. At the moment, Centenary Bank has a 68.4 per cent cost to income ratio, which is understandable considering the high cost of serving the rural poor.

3. Mumba Kalifungwa

Managing Director, Absa Bank Uganda

Period in Charge: 3 months  

2019 Asset Value: UGX3.4 trillion

Market Share: 10.4 per cent

Industry Rank: 3

In November 2019, the Barclays logo started disappearing from Uganda’s billboards, buildings, cheque-books, ATM cards, credit cards, and all official communication. To replace these, was a new brand name, Absa. The process was completed in January 2020 with Absa completely painting Uganda red and its Africanacity vibe screaming from all corners, marking an end to the Barclays brand that had been in Uganda since 1927. On top of the rebranding that will give the bank a new “African-led” direction, Absa Uganda had an impressive 2019 jumping from the fifth-largest bank by assets in 2018  to the third-largest bank (UGX3.4 trillion) controlling 10.4 per cent of all banking assets. The bank also moved up to third position from the fifth in deposits and loans, holding 9.38 per cent and 9.37 per cent of the industry share, respectively.

To lead the bank into the consolidation journey is Mr. Mumba Kalifungwa. Kalifungwa was appointed the Absa Uganda CEO role is March 2020, replacing Nazim Mahmood who saw the bank through the rebranding and integration and setting a soft landing for Kalifungwa.

Being in 3rd position in terms of assets, deposits and loans however didn’t reflect in the profitability. Absa’s 2019 after-tax profit was UGX78 billion – 11.4 per cent profit growth, the lowest of the top 5 banks, yet with the impressive balance sheet build-up, it could have posted after-tax profit of over UGX100billion, but this was eaten into by a cost to income ratio of 75.8 per cent, higher than the industry average of 74 per cent possibly due to the immense changeover costs as well as high non-performing loans- at UGX110 billion. Kalifungwa will have to bring down costs to below the industry average and sanitise the loan book to deliver a bigger bang for his kind of asset book.

Thankfully, he has a sturdy UGX1.33 trillion loan book to work with and a solid banking experience to rely on. Before Uganda, Kalifungwa held various positions within the Group, most recently serving as Chief Financial Officer for Absa Bank Botswana Limited since 2015. Before that, he was the Chief Financial Officer in Zambia.

4. Albert Saltson

CEO, Standard Chartered Bank

Period in Charge: 3 years, 3 months

2019 Asset Value: UGX3.2 trillion

Market Share: 9.6 per cent

Industry Rank: 4

Standard Chartered Bank had always been the de-facto number two bank until Dfcu’s acquisition of Crane Bank in 2016 forming a larger and No.2 bank. Over the last 3 or so years, the bank has been on a deliberate digital path, rolling back some branches. In January 2019, the bank launched what in their words, is “Uganda’s first fully digital online banking solution” that allows its clients access to over 70 self-service requests. Clients would also be able to open an online Standard Chartered Digital Life Account in under 5 minutes, without going to the branch via a downloadable Standard Chartered Mobile App.

As at the end of 2019, the bank reported that over 86per cent of client interactions happened outside the brick and mortar branch.

And this digital focus is paying off- Standard Chartered still has an impressive asset base of UGX3.1trillion – 7.9per cent growth in 2019. Deposits were up 10.9per cent to UGX2.133trillion in 2019 although the bank did slow down on lending; the loan book declined by 3per cent to UGX1.27trillion. Nonetheless, Standard Chartered Bank remained the 4th largest lender in the entire banking sector, lending out UGX1.3 trillion. This and other sources of income generated a 30.2 per cent rise in after-tax profit to UGX125 trillion.

Saltson joined Standard Chartered Bank Uganda in April 2017 as CEO, after spending 5 years and 8 months as CEO at Standard Chartered Bank Gambia and Standard Chartered Bank Sierra Leone respectively.

Perhaps one of his greatest achievements has been cleaning the loan book. It shall be recalled that in 2016 and 2017 Standard Chartered Bank had one of the highest NPLs in the industry- UGX112.1 billion and UGX78.6 billion respectively.

But for 2018 and 2019, NPLs stood at just UGX22 billion and UGX23 billion respectively- the lowest of the top five banks.

5. Mathias Katamba

Period in Charge: 1 year, 7 months

2019 Asset Value: UGX2.96 trillion

Market Share: 9 per cent

Industry Rank: 5

Generally, 2019 was a good year for dfcu Bank and Mathias Katamba its Managing Director. The bank posted a 21per cent growth in profitability from UGX60.9 billion to UGX73.4 billion.

The results, are Katamba’s first full-year results since he joined the bank in December 2018 and certainly much better than 2018 when the bank posted a 66 per cent decline in profitability- from UGX127.6 billion in 2017 to UGX61.7billion.

In 2019, Katamba made a strong double-digit come-back, with lending growing by 10per cent from UGX1.398 trillion in December 2018 to UGX1.539 trillion in December 2019- compared to a growth rate of 4.7per cent in 2018.

Customer deposits also recovered, growing by 3 per cent from UGX 1.979 trillion to UGX2.039 trillion- the first time the bank’s deposits are crossing the UGX2 trillion mark, a sign of growing consumer confidence. Strong lending, driven by deposits growth, also saw the bank’s assets recover from a 4.7per cent decline in 2018, to post a 1per cent increase from UGX 2.916 trillion to UGX2.958 trillion, just a few billions shy of the UGX3 trillion mark!

This strong performance was underlined by a 4 per cent reduction in operating costs from UGX202 billion in December 2018 to UGX193 billion in December 2019 as well as a 7 per cent cost reduction in the cost of funds, from UGX105 billion to UGX97.6 billion in interest expenditure. This gave rise to a 4 per cent growth in net operating income from UGX306 billion in December 2018 to UGX319 billion in December 2019.

Although the exceptional growth of Absa in 2019 and an equally strong Standard Chartered Bank edged dfcu from its short-lived glory in the 3rd industry place in 2018 to the fifth place, dfcu Bank remains a power to reckon with, controlling 9 per cent of industry assets, 8.7 per cent of deposits and 10.8 per cent of the loan book.

6. Raj Kumar Meena

Managing Director, Bank of Baroda

2019 Asset Value: UGX3.6 trillion

Market Share: 5.7 per cent

Industry Rank: 6

Raj Kumar Meena is the gentleman brought in April 2020 to bring back Bank of Baroda to the profitability the shareholders believe is right for the bank. He replaced Ashwini Kumar during whose time, Baroda’s assets appreciated 22.1% from UGX1.53 trillion to UGX1.9 trillion.

Much as Baroda’s profits in 2019 fell by 38.2% to UGX45.4 billion from UGX73.5 billion in 2018, Baroda still remains a very solid bank, controlling 5.7 per cent of total industry assets. Customer deposits grew by 10.5%, reaching UGX1.4 trillion from UGX1.3 trillion, hence powering a 6.22% growth in lending to UGX804.2 billion from UGX757.2 billion.

If R.K Meena can bring under control the 25.46% spike in the cost of money and a 17.78% rise in operating costs that in 2019 ate into the humble 2.03% growth in income and subsequently caused profit to dip, R.K Meena can be assured of his job. He will also need to continue keeping the clean loan book that he inherited, with probably the lowest NPLs ratio (1.2 per cent) in the industry.

He is a solid banker, with more 28 years of retail banking, corporate and agriculture finance as well as marketing experience from a largely developing market in India, so finding his way around shouldn’t be a problem.

7. Varghese Thambi

CEO, DTB Bank

2019 Asset Value: UGX1.7 trillion

Market Share: 5.2 per cent

Industry Rank: 7

Diamond Trust Bank (DTB) for the second year in a row remains the seventh-largest bank, although that position is under threat from a fast-rising Equity Bank. For DTB, the challenge is being able to generate a good profit from what is a decent balance sheet. Deposits grew by 14.8per cent to UGX1.32 trillion whereas the loan book expanded by 9per cent to UGX582billion. DTB’s asset base rose by 6.9per cent to UGX1.7trillion, which kept the bank in seventh place in part due to increased lending to the government. DTB’s investment in government securities rose by 18per cent to UGX708 billion – the fourth-highest investment in government securities in the entire banking sector.

Varghese Thambi, the CEO DTB is the longest-serving commercial bank CEO since his appointment 13 years ago. Thambi’s leadership has led DTB to become a bank for Uganda’s private sector businesses from just focussing on corporate bankers. In 2019, DTB’s after-tax profit grew by 12.5per cent to UGX19.8 trillion – the lowest after-tax profit in the top 10 banks. The challenge for Thambi and team has been a relatively high cost to income ratios of 87.5per cent – the highest in all the top 10 banks – that tends to result into lower profitability. Although this is a considerable reduction from the 96.2per cent cost to income ratio the bank faced in 2018.

8. Samuel Kirubi

Managing Director, Equity Bank Uganda

Period in Charge: 4 years, 6 months

2019 Asset Value: UGX1.6 trillion

Market Share: 5 per cent

Industry Rank: 8

Equity Bank remained in the 8th place but edged much closer to the seventh place than before. In 2018, Equity’s asset base was UGX430 billion far apart from DTB, in the 7th position, but in 2019, that gap reduced to just UGX90 billion after Equity Bank assets galloped by 38.4 per cent to UGX1.627 trillion. Equity has also narrowed down the gap between itself and DTB in terms of customer deposits from a difference of UGX273.3 billion in 2018 to UGX72.8 billion!

Equity Bank’s loan book in 2019 overtook both DTB’s and Bank of Baroda’s, making it the sixth-largest lender with a loan book of UGX1trillion, representing a 44 per cent growth over the previous year.

At the centre of this growth is Samuel Kirubi who joined Equity Bank as CEO in 2015. Since then, Equity Bank’s customer deposits, assets, and loan book have grown by 161 per cent, 161.5 per cent, and 305 per cent respectively. This makes Equity the fastest growing bank in Uganda since 2015 and what remains is the bank now positing even higher net profit driven by an aggressive drive to grow its footprint through the agency banking network.

After-tax profit grew by 6.2 per cent to UGX37.2 trillion. Equity’s profitability could have been better, but the cost to income ratio rose to 75.5 per cent from 53.3per cent, leading to lower profitability. One of the drivers for the growth in costs are the provisions for the bad or doubtful debts. Nonetheless, Equity is still in a good position to continue on this impressive trend considering that only 1.4per cent of total loans were actually NPLs.

9. Sarah Arapta

CEO, Citibank Uganda

Period in Charge: 4 years, 6 months

2019 Asset Value: UGX991 billion

Market Share: 3 per cent

Industry Rank: 9

Citibank, unlike all other commercial banks in Uganda has a different mode of operation with its focus being largely, corporate banking, intermediation, corporate finance, treasury services and trade finance. Citi has positioned itself as a banker of large corporate customers as well as high networth individuals. An analysis of Citibank can’t be through the same lens as the other commercial banks. That said, even with its one branch, it remains in the top 10 banks occupying the ninth position for the second year in row with assets of UGX991 billion up by 8.4 per cent in 2018. At UGX991 billion, CitiBank is on the brink of entering the Trillionaire’s Club, CEO East Africa’s unofficial list of banks with over UGX1 trillion in assets.

Led by Sarah Arapta since 2016, the performance of Citibank in 2019 could be described as mixed especially since lending by the bank declined by 45.3per cent to UGX169.5 billion dampening the potential for higher interest income earned. In fact the total income for Citi only grew by 0.73 per cent to UGX96.2 billion whereas expenses rose by 13.5 per cent to UGX42 billion. This then contributed to the 6 per cent decline to UGX39.5 billion in after-tax profit in 2019 for Arapta. Deposits grew by 22.5per cent to UGX657 billion, which is a market share of 2.8per cent. However, Citibank also still enjoys the lowest cost to income ratio of 43.6 per cent in the entire banking sector.

10. Michael Karokora Mugabi

MD, Housing Finance Bank

Period in Charge: 1 year, 8 months

2019 Asset Value: UGX912.5 trillion

Market Share: 2.8 per cent

Industry Rank: 10

In 2019, Housing Finance Bank overtook Bank of Africa to become the tenth largest bank controlling at least 2.7per cent of the entire banking assets.

Housing Finance Bank’s rise has been ten-years coming especially since the bank in 2008 diversified from a specialist mortgage lender to include traditional banking and even changed names from Housing Finance Company to Housing Finance Bank- heralding a decade of steady growth.

Over the last 10 years, the bank’s assets have grown at a compounded annual growth rate (CAGR) of 10 per cent, from UGX360.1 billion in 2010 to UGX912 billion- a growth of 154.3per cent per cent or UGX552.4 billion!

But perhaps, more interestingly, 25 per cent of this UGX552.4 billion- UGX135.6billion, was added in just one year- 2019!

2019 also happens to be Michael Mugabi’s first full year as HFB Managing Director, since his appointment in late 2018 to replace Mathias Katamba, who left to join dfcu Bank. Although 2019 was his first year at HFB, Mr. Mugabi is no stranger to Housing Finance Bank, having been its Executive Director, since 2012.

In 2019 alone, assets grew by 17.5 per cent from UGX776.9 billion to UGX912.5 billion, compared to the 10-year 10 per cent CAGR. This was on account of a 24 per cent growth in deposits, from UGX451.3 billion in 2018 to UGX559.8 billion in 2019, versus a 10-year 13 per cent CAGR. Lending also grew by 8.2 per cent from UGX511.6 billion in 2018 to UGX553.5 billion in 2019.

As a result, profit growth that in 2018 had slowed down, has since picked up, albeit moderately; growing by 7.6 per cent in 2019, from UGX20.9 billion in 2018 to UGX22.5 billion in 2019 compared to a 4.5 per cent growth in 2018.

Now that he has the full reigns, all eyes are on him.

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