Centenary Bank beats profit target

KAMPALA, UGANDA – Centenary, Uganda’s largest indigenous bank, recorded strong growth in profit and assets in the financial year 2012.
This is in spite of operating in a difficult environment weighed down by the persistent effects from the global financial crisis.
Profit after tax increased to Ush54.9 billion (about $20.7 million) up from Ush47.9 billion (about $18 million) in 2011, enabling management to deliver better dividends to shareholders.
Commenting on the latest performance figures, Professor John Ddumba-Ssentamu, Chairman of the Board Centenary Bank said, “Focus remained on microfinance particularly in rural areas, in line with our mission of providing appropriate financial services especially microfinance to all people in Uganda, particularly in rural areas in a sustainable manner and in accordance with the law.”
“The provision of microfinance has been and will remain the focus of Centenary Bank. However, to reduce business risks, the Bank has diversified her activities to include lending to small and medium enterprises and large corporations to reach the middle and higher-end markets in order to provide services to sectors that are complimentary to its target market and customers.”
According to the bank statement, the better than expected performance was due to ‘robust capitalisation and healthy liquidity profile which put it in a strong position to take advantage of arising business opportunities in the highly competitive market’.
Centenary’s total assets grew by 19% to Ush1.1 trillion (just over $400 million) in 2012 up from Ush944 billion in 2011. Expansion of bank service centres by adding 10 and aggressive marketing helped this growth.
As a result, the total number of its branches and Automated Teller Machines (ATMs) increased to 58 and 142, respectively.
Consequently, the bank’s customer base rose to 1.3 million, putting it in a better position to strengthen its lending capacity.
The growth in customer numbers also saw the bank’s customer deposits jump to Ush818 billion from Ush694 billion in 2011.
As a result, the credit division was able to extend over half a trillion shillings in loans and advances to borrowers.
The bank adds that its strong profit performance was underpinned by a robust growth in net income which stood at Ush240 billion up from Ush189 billion the previous year.
This was largely due to the rise in net interest income against the back drop of good customer service, affordable interest rates, and increased lending opportunities in the market.
Centenary’s total income is comprised of interest income, income from commissions and fees and other non operating income.
With economic growth expected to rebound in 2013 and the Central Bank easing on its tight monetary policy, Fabian Kasi, the Centenary Managing Director said the bank would leverage is wider branch network to encourage more people into its fold. “We expect 2013 to be a much better year than 2012.
Centenary Bank will continue with the expansion program, putting in place adequate platforms to serve our customers better.
“The Bank’s medium-term objectives will be focused on the growth and innovation of products and services, improve the quality of customer service and the efficiency of the Bank’s operations, while consolidating the bank`s position as the leading microfinance provider in Uganda,” he said.

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