This archive report was first published on 23 August 2020.
On Friday, Stanbic Bank Uganda reported a 7.4 per cent decline in half-year pretax profit, a consequence of the stringent lockdown measures implemented to curb the COVID-19 pandemic.
The bank, a subsidiary of South Africa's Standard Bank, saw its profit drop to 169.2 billion shillings ($46 million) in the six months ending June, down from 182.8 billion shillings for the same period last year.
Uganda's government had imposed one of Africa's strictest lockdowns, shutting down all non-essential businesses, halting travel, closing schools, and sealing borders to all but cargo transport.
Stanbic Bank's Chief Executive, Anne Juuko, stated that the bank had waived all charges on transactions on its digital banking platforms to promote cashless transactions and minimize the risk of coronavirus infection, a move that negatively impacted revenues.
Additionally, the bank offered credit relief programs to business and personal customers to mitigate the pandemic's impact on their businesses.
Stanbic Bank also lowered its lending rates to ease pressure on existing customers and encourage borrowing in a depressed economic environment.
As part of efforts to keep credit flowing to businesses affected by the pandemic, the Central Bank of Uganda had been pressuring commercial banks to reduce lending rates.
Earlier in July, the central bank threatened to cap commercial lending rates, citing that some banks had failed to respond to cuts in benchmark rates.
The Central Bank of Uganda had slashed its benchmark rate twice this year, bringing it down to a record low of 7 per cent.
Despite the challenges, Stanbic Bank reported a 24 per cent rise in the value of new loans in January-June, compared to the same period last year.
