Stanbic Uganda Holdings Limited said its annual net profit rose by 15.2 per cent and was mainly driven by its anchor subsidiary, Stanbic Bank Uganda.

Stanbic said its net profit for the 12 months to December 2023 totalled Sh411.5 billion, underpinned by higher net interest income, particularly interest on loans and advances, which grew at the fastest rate in four years.

Preprovision income, which doesn’t exclude operating expenses, grew by 15.1 per cent to Sh1.2tn, faster than the 14.9 per cent growth in 2022. However, a rise in both loan loss provisions and operating expenses, compared with a fall in both in 2022, meant that profits grew at a slower rate. In 2022, net profit increased by 32.7 per cent year-on-year.

“While our operating expenses generally remained high, it was on account of sustained investment in our people and technology to drive the group strategy of enhancing efficiency and transforming the client experience,” Francis Karuhanga, chief executive of Stanbic Uganda Holdings Ltd said in a statement.

Total income at Stanbic Bank, SUHL’s largest subsidiary and Uganda’s largest bank by assets, rose 16.8 per cent to Shs1.3tn, the fastest rate since 2019. Growth was driven by interest on loans and advances, up 20.6 per cent to Shs597bn, and interest on investment securities and net fees and commissions income, up 26.3 per cent to Shs163.2bn and 15 per cent to Shs202.7bn respectively.

The bank reported a 20.9 per cent increase in total expenses, compared to a 0.2 per cent decrease in the previous year, mainly due to increases in operating expenses, interest expenses on borrowed funds, and loan loss provisions. Profit before tax increased by 12 per cent to 553.6 billion shillings, compared to an increase of 37.4 per cent in the previous year. Net profit increased by 15.1 per cent to Shs421.4bn.

SUHL said it would pay a dividend of Sh3.03 per share for the year, compared with Sh3.61 last year.