Faced with the adverse consequences of the war in Russia-Ukraine which induced high global commodity prices, tight global financial conditions, and adverse weather conditions, the economy experienced a growth of only 4.6% compared to a range of 6.5 – 7.0% which was initially expected. The domestic economy remains resilient to the current external shocks and is projected to grow in the range of 5.0-5.3 percent in 2023 driven by improvement in agricultural productivity as a result of government interventions, investments in the oil sector, and a rebound in industrial activities.
Inflation stood at a rate of 10.2% at the end of 2022, this was due to the impact of the earlier increase in global energy and non-energy prices, increased domestic demand, and exchange rate depreciation as a result of Russia-Ukraine. Inflation will continue to moderate, averaging between 6-8 percent in 2023, and stabilize by the end of the year. This forecast expectation is due to the dissipating impact of the earlier increases in global commodity prices, subdued domestic demand, and lower-than-anticipated exchange rate depreciation.
This year, the Bank enjoyed an 8.2% (2021: 13%) asset growth, having the highest growth from loans and securities with loans having a growth of 14.2% (2021: 3%) and securities posting a growth of 18% (2021: 12%).
Deposits held by the bank have grown by 12.7% (2021: -2%) compared to the previous year where there was a decline. The bank’s assets grew as mentioned earlier due to increase in the customer deposits which the Bank could invest.
The Bank also increased its paid-up share capital to UGX 150 Billion (2021: 46.7 Billion) as a requirement by the Central Bank which brought about its increase in the Tier 1 core capital by 14.5%.
The Bank’s net operating income grew by 9.9% during the year while the net income increased by 5.7%, the increase in the operating income was not in-line with the increase in net income due to increased cost of risk which increased from 1.2% to 1.9% during the year.
The Bank continued to pursue digitization especially in response to the sustained effects of the pandemic on traditional banking and consequently continued to see more than 80% of the transactions conducted on channels other than the Branch.
Along with the specific sector focus, risk management and efficiencies, the Banks goals are set on growth to achieve improved profitability in 2023.
Bolstered by the promising and more stable macroeconomic performance, the Bank’s strategic ambitions will now be entrenched on sector-focussed credit growth, enhanced service supported by digital alternative channels, enhanced operational efficiencies and risk mitigation.