Things are definitely looking up for one Barclays Bank Uganda which has registered a 31 per cent increase in after tax profit. Which is a jump to Ush70 billion in 2015, from Ush53 billion in 2014. The figures are according to their 2015 financial report. This announcement was made in a media briefing prior to their release on their financial results which are expected to be made today.
Mr Rakesh Jha, the banks managing director, had this to say, “We had challenges with the merger with Nile Bank and we had challenges with technology which we have addressed,”
“2015 was the year we rolled out a few strategies for the business and they have responded very well. We have been able to grow our income from 170 to 2010 billion in 2015, a growth of 20 per cent,” he added.
The bank attributes the growth in profits to new reforms and strategies which the bank implemented in 2015. Mr. Jha said one such reform was adopting ‘a deep vs wide bank’ approach which helped the bank to create a deeper relationship with their customers.
The migration of customers from branches into automated and technological channels which has seen the bank significantly cut on costs bringing the income ratio to 63 per cent in 2015 which is a drop from 61 per cent recorded in 2014.
Customer assets grew by 30 per cent despite the harsh macro-economic environment in 2015, when interest rates were shooting up. The weakening of the Shilling resulted in Bank of Uganda (BoU) raising the benchmark lending rate which in turn affected the operating environment for commercial banks.
The bank also managed their loan performing ratios which the managing director said were within their budget. The loans went up by 20 per cent against a loan to deposit ratio of 66 per cent to 54 per cent.
The bank revealed that they plan on cutting down the number of branches and converting them to digital branches with intelligent ATMs. This is meant to reduce dependence of people in the various branch locations. The digital branches will have all the digital self-service devices which will enable customers to transact more conveniently.
The bank will also consolidate some branches in a bid to achieve their digital agenda. However, “…this does not mean we shall reduce our branch network, but rather shifting our approach to using technology,” Mr Jha expounded.
The Jinja and Kampala branches were the first to be opened by Barclays Bank. That was back in August 1927. With an Employee base of more than 1,000 people. It serves more than 350,000 customers and clients across the country through its 65 ATMs and 40 distribution.
This is definitely plus for the Banking Sector in the East Africa Region.