KAMPALA, Uganda— Non-performing loans across Uganda’s banking sector decreased to 1.019 trillion shillings in 2024, down from 1.18 trillion shillings in 2023, though Equity Bank leads a list of 10 commercial banks with a non-performing loan ratio above the central bank’s 5% threshold.
Despite the overall reduction, the industry’s average non-performing loan ratio stands at 4.69%, according to financial statements published by banks for the year ending Dec. 31, 2024. Banks are required to release these statements before May of the following year.
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The Bank of Uganda, the nation’s banking regulator, defines non-performing loans as those in which a borrower has not made scheduled principal or interest payments for 90 days or more. High non-performing loan ratios can tie up a bank’s capital, reduce profitability and damage its reputation.
Equity Bank reported the highest non-performing loan ratio at 16.6%, even as its non-performing loans decreased to 216.01 billion shillings in 2024 from 363.97 billion shillings in 2023. The bank’s loans advanced to customers totaled 1.3 trillion shillings in 2024. Gift Shoko, Equity Bank’s managing director, and his team have implemented measures to reduce these loans, contributing to the bank’s return to profitability with a net profit of 20.14 billion shillings in 2024, a significant turnaround from an 18.77 billion shilling loss in 2023.
Cairo Bank Uganda followed with a non-performing loan ratio of 12.36%, with its non-performing loans at 22.12 billion shillings in 2024, down from 34.29 billion shillings in 2023. Absa Bank Uganda held the third-highest ratio at 10.64%, with its non-performing loans increasing to 211.8 billion shillings in 2024 from 175.2 billion shillings in 2023.
Other banks with non-performing loan ratios exceeding 5% include Diamond Trust Bank (7.18%), Tropical Bank (6.83%), Housing Finance Bank (6.52%), I&M Bank (6.52%), KCB Bank (6.17%) and PostBank (5.65%).
Uganda currently has 22 commercial banks. Three banks — ABC Capital Bank, Opportunity Bank and Guaranty Trust Bank — downgraded to Tier II Credit Institution Licenses effective July 1, 2024, after failing to meet the Bank of Uganda’s new minimum capital requirement of 150 billion shillings for commercial banks. The paid-up capital for Tier II credit institutions is 25 billion shillings.
Banks with non-performing loan ratios below 5% include Bank of Baroda (0.20%), Ecobank (0.46%), United Bank for Africa (0.55%), Bank of India (0.84%), Stanbic Bank (1.6%), Bank of Africa (2.32%), Centenary Bank (2.72%), Exim Bank (2.85%), Standard Chartered (3.13%), Finance Trust Bank (3.67%), NCBA (3.97%) and Dfcu Bank (4.5%).
