Uganda’s banking sector profitability reached a combined net profit after tax of Shs1.689 trillion for the year ended March 2025, according to the latest Bank of Uganda financial stability review. Increased lending activity, driven by a rebound in economic growth, largely contributed to this strong performance.
Bank of Uganda emphasizes that banking sector profitability plays a key role in maintaining financial stability. Profitable banks attract investors, increase capital inflows, and boost their lending capacity. These factors channel savings into productive investments essential for Uganda’s economic growth.
Credit institutions earned Shs9.7 billion in profits during this period, while Microfinance Deposit-Taking Institutions (MDIs) significantly improved their earnings to Shs21.2 billion, compared to Shs1.7 billion the previous year. This growth positions Supervised Financial Institutions (SFIs) to diversify products, invest in technology, expand lending, and support economic growth and resilience.
Profitability also strengthened capital adequacy across the sector. As of March 2025, core capital adequacy ratios stood at 25.4% for commercial banks, 26.7% for credit institutions, and 43.4% for MDIs. These figures comfortably exceed regulatory minimums of 12.5% and 15%.
Six Domestic Systemically Important Banks (D-SIBs) — Stanbic, Standard Chartered, Centenary, dfcu, Absa, and Equity Bank — hold 49.9% of total banking assets. These banks maintain strong capital buffers and face enhanced regulatory oversight due to their systemic importance. This ensures they remain resilient and able to absorb potential shocks.
Digital payments continue to grow rapidly, supporting the sector’s profitability. Real Time Gross Settlement (RTGS) transactions rose 22.3% in volume and 21.6% in value, while Electronic Funds Transfer (EFT) values through the Automated Clearing House (ACH) increased by 3.4%. Meanwhile, cheque use declined to just 7.1% of total transaction value as digital payments gained dominance.
Mobile money remains the most active platform, with active accounts growing 166% to 33.7 million. Transaction volumes and values increased 20.9% and 25.5%, respectively. Low-value transactions under Shs50,000 accounted for 92.2% of activity, showing the platform’s role in expanding financial inclusion.
Digital lending surged to Shs2.9 trillion, with over 102 million loans disbursed. Agent banking grew by 48.7% in agent numbers, although the share of active agents declined slightly due to commission disputes. Despite this growth, Bank of Uganda warns that cybersecurity risks require stronger infrastructure and improved risk management.
The sector’s exposure to public debt rose slightly to 30.4% of assets from 29.9% in December 2024. However, SFIs remain well capitalized and comply with exposure limits, allowing continued support for both public and private investments.
Read: Uganda’s Digital Economy Booms Despite Challenges in 2025
