KAMPALA —Uganda’s banking sector in 2024 was a whirlwind of change and growth, marked by significant regulatory reforms, digital banking innovations, and an improving economy. Despite facing some tough challenges, the sector showed remarkable resilience, setting the stage for continued progress in 2025.
CEO exits and leadership changes:
Leadership changes dominated the headlines this year. Several banks saw their top executives move on, paving the way for new leaders with fresh ideas and strategies.
In February, Anne Juuko stepped down as Stanbic Bank Uganda’s Chief Executive Officer after four notable years to take on a new role with the Standard Bank Group in Nairobi, Kenya. Her time at Stanbic was marked by navigating the bank through the tumultuous period of the COVID-19 pandemic and setting numerous benchmarks.
June brought another shift when Godfrey Byekwaso was appointed Acting Managing Director of Centenary Bank in Malawi, following the retirement of Zandile Shaba, who had led the bank since 2017. Byekwaso’s appointment is expected to inject new energy and direction into the institution.
In November, Equity Bank Uganda announced that Anthony Kituuka would be stepping down as CEO, effective March 1, 2025. His two-year tenure saw significant growth and strategic developments. On December 5, United Bank for Africa Uganda Limited (UBA) welcomed Kenneth Kisambira as its new Managing Director and CEO.
Stanbic Bank Uganda made headlines again in December, announcing that Mumba Kalifungwa, currently the Managing Director at Absa Bank Uganda, would take over as CEO starting March 1, 2025. In response, Absa Bank appointed David Wandera as interim Managing Director.
Bank exits and closures
Standard Chartered Bank announced its plans to exit the retail banking market in Uganda, opting to focus on corporate and institutional banking instead. On the other hand, the Bank of Uganda revoked the licenses of two financial institutions: EFC Uganda Limited, a microfinance company, due to poor financial standing and Mercantile Credit Bank Ltd, a Tier II financial institution, citing poor governance and failure to meet capitalization requirements. The closures were aimed at protecting depositors’ interests and maintaining stability in the financial sector.
High Interest Loans and Credit Growth:
Even with high interest rates causing some concern, Uganda’s banking sector saw robust credit growth. The Bank of Uganda’s policy rate reductions made credit more accessible, pushing average lending rates down and stimulating economic activity. Banks reported increased loan disbursements, particularly to small and medium-sized enterprises (SMEs), which are vital for economic development.
Cybersecurity Concerns and Hacking Incidents:
Cybersecurity remained a critical issue throughout 2024, with several high-profile hacking incidents underscoring the sector’s vulnerabilities.
In April, Equity Bank suffered a cyberattack that compromised customer data and disrupted online services. Hackers exploited weaknesses in the bank’s online platform, leading to unauthorized transactions. The bank responded by upgrading its security protocols and compensating affected customers.
Stanbic Bank faced a similar threat in July when cybercriminals attempted to siphon funds through a phishing scheme. The bank managed to thwart the attack, but it prompted a comprehensive review of its cybersecurity measures.
The most alarming incident involved the Bank of Uganda in October. A criminal group known as “Waste,” believed to be operating out of Southeast Asia, managed to transfer 62 billion Ugandan shillings (approximately $16.8 million) to overseas accounts. The breach, which occurred in early November, was quickly contained, but it highlighted significant cybersecurity gaps. In response, the Bank of Uganda ramped up its security measures and worked with international experts to strengthen its digital defenses.
Mobile money platforms were also targeted. In August, MTN Uganda’s mobile money service was hacked, resulting in substantial financial losses for users. The company responded by overhauling its security systems and launching an awareness campaign to educate customers on cybersecurity best practices.
Digital Banking and Financial Inclusion:
Digital banking continued to reshape Uganda’s financial landscape in 2024. Banks rolled out a variety of innovative digital products and services, including mobile banking apps, online banking platforms, and agent banking services. These advancements helped bring banking services to remote and underserved communities, significantly expanding financial inclusion. Mobile money platforms, in particular, saw substantial growth, enabling more Ugandans to access financial services easily and conveniently.
Regulatory Reforms and Governance:
The Bank of Uganda introduced new regulations aimed at enhancing corporate governance and risk management practices. These reforms promoted transparency, accountability, and stability, bolstering the overall health of the banking sector.
A significant milestone was the transition of Pride Microfinance to Pride Bank after receiving a Credit Institution license. This change marked its upgrade from a Tier III Microfinance Deposit-taking Institution to a Tier II Credit Institution.
Additionally, the Bank of Uganda oversaw the launch of Salaam Bank, a Sharia-compliant institution. Salaam Bank aims to diversify financial services in Uganda by providing Islamic banking options, thus promoting financial inclusion and catering to various segments of the population.
Access Bank, a subsidiary of Access Holdings, also made a major move by agreeing to acquire a majority stake in Finance Trust Bank (FTB) in January. Pending regulatory approval, this acquisition would give Access Bank an 80% stake in FTB, providing FTB customers with access to more secure digital platforms and leveraging Access Bank’s industry expertise.
Outlook 2025:
Data from the Bank of Uganda and the Ministry of Finance suggest a promising year marked by stability, innovation, and expanded financial inclusion.
The Ministry of Finance projects a steady economic growth rate for 2025, driven by increased agricultural output, infrastructure investments, and a rebound in global commodity prices. This positive economic outlook, coupled with the Bank of Uganda’s accommodative monetary policies, is expected to create a favorable environment for the banking sector. Lower interest rates and improved liquidity conditions will likely enhance credit availability, particularly for small and medium-sized enterprises (SMEs), spurring economic activity and growth.
The Bank of Uganda’s ongoing regulatory reforms will continue to enhance the stability and transparency of the banking sector. These reforms are aimed at strengthening corporate governance, risk management, and compliance standards across financial institutions.
Digital banking is set to expand significantly in 2025, driven by increasing smartphone penetration and greater internet accessibility. The Uganda Communication Commission (UCC) data indicates a rapid uptake of mobile and internet banking services, reflecting a shift towards more convenient and accessible banking solutions.
This digital transformation will likely accelerate financial inclusion, bringing banking services to previously underserved and remote areas.
Innovations in mobile money and agent banking will continue to play a pivotal role in this expansion.
