Doing Good Is Good Business: Stanbic defies a Covid-19 infested 2020 by remaining true to troubled customers

As the Covid-19 pandemic started biting in mid-2020 and most banks were scaling back on lending, Stanbic did not quite scale back- although they didn’t open their purse strings wide either. Through a delicate balancing act, the bank in 2020 lent out UGX3.6 trillion- UGX766 billion more than the UGX2.8 trillion it lent out in 2019. But it didn’t stop there, it restructured UGX800 billion worth of loans and cut its lending by a whole 2 percentage points from 18% to 16 and in the process foregoing UGX26bn in interest-earning. At the same time, the bank also stepped up it charity work, spending UGX3.9 billion on corporate social investments- 67% more than the UGX2.3 billion it donated in 2019. And as you can imagine, the market rewarded the bank with growth across the board, except profits. But even then, profit dipped slightly- just 6.8% from UGX259 billion in 2019 to UGX242 billion in 2020. In this interview, Anne Juuko, the bank’s Chief Executive, shares some insights behind the 2020 performance and the way forward.   

What are the main highlights in Stanbic Bank’s performance in 2020?

Stanbic Bank’s performance has been commendable despite a difficult year riddled with challenges brought on by the pandemic. The Bank has shown resilience and sustained momentum as it executed its strategy.

Among the key highlights, we saw customer deposits grow from UGX 4.7 trillion to UGX 5.5 trillion, which further supported new credit to key sectors in much need of support especially during the peak of the pandemic. Net loans and advances increased by 26.8% year on year from UGX 2.9 trillion to UGX 3.6 trillion as more clients acquired loans to sustain their businesses.

However, total asset quality deteriorated year on year due to the impact of the Covid-19 pandemic on client businesses. Our provisions for non-performing loans grew by 110% from 2019 UGX43.5 billion to 2020 91.8 billion.

Nonetheless, Stanbic Bank remains a strong and well-capitalised bank committed to our purpose “Uganda’s our home and we drive her growth” by contributing to economic growth and transformation.

What key interventions did Stanbic Bank put in place to support clients and the community during the pandemic?

Lowered prime lending rate: We remained true to our promise that our lending rates will be transparent and as such, we consistently lowered the prime lending rate in line with the Central Bank Rate (CBR), from 18% to 16%, therefore saving customers interest payments worth UGX 26 billion. Our aim is to ensure our customers can benefit from more affordable lending rates.

Credit relief programmes: We offered credit relief programmes to its customers in response to COVID –19 challenges with over UGX 800 billion worth of loans were restructured in 2020.

Community Investments: We increased our support to the community and invested UGX 3.9 Billion (2020), a 69.7% increase from UGX 2.3 billion (2019) through our CSI programmes. We made donations to frontline health works in collaboration with the Ministry of Health, contributed food and supplies to in local communities where we operate and continued our support in education, environment and maternal health.

Our People Promise: Our employees are the foundation of our business. Last year was a very critical year and we focused all our efforts on the well-being of our teams during the pandemic from the provision of health care to any support needed for their safety, productivity and wellness.

With FID on the horizon for Uganda’s oil and gas sector, what is Stanbic’s involvement in the sector?

Stanbic Bank is playing a key role in the development of Uganda’s Oil and Gas sector. The emergence of Oil and Gas will create vast opportunities for the local economy and our role as the bank is to provide financial solutions to clients across the entire value chain especially for local companies looking to participate in the sector. Stanbic Bank and Standard Bank Group is involved as the financial advisor relating to the Oil and Gas project.

We support responsible investment through assessing and managing our environmental, social and governance (ESG) risks to ensure the successful implementation of the project.

Looking ahead, what are the bank’s priorities for 2021?

Our aim this year is to continue to deliver on our promise to make dreams possible for our clients. Our priorities are:

Transforming client experience: Using digital technology, data and human insight we aim to understand our clients, partners and employees as deeply and empathetically as we can. One of the ways we are improving the client experience is through our digital loan offering, where customers can now apply for a loan online or on their mobile phones and get the loan in under five minutes. By creating greater efficiency, our customers save time and we make it easier for them to access the financial support they need.

Managing our risks: Ensuring that the business has a robust risk management framework that ensures we are doing business the right way to enhance the value our client experience and enjoy.

Sustainability: The Bank is committed to the implementation of the Social, Economic and Environmental (SEE) priorities which aim to deliver inclusive, enduring and environmentally sustainable value to our shareholders and to the societies and economies we serve.