How much of the profits do banks reinvest in the economy? Which bank is the most efficient? Why would banks making profits suddenly go belly up?
The summitBI® Banking Report 2019 (summitBIR19) (based on the published FY 2018 annual reports by banks as required by section 26 of the Financial Institutions Act, 2016 provides answers to all these questions. The report reflects that international banks control more than 75% of the banking sector, thereby exposing the economy to high risks of capital flight. This risk manifests in terms of increased dependency on foreign service providers for services that would otherwise be available locally at lower costs.
In Uganda, the top 10 banks (of which 80% are international) control over 96.85% of total industry profits after tax and over 81% of the total capital employed. In Kenya, the picture is different. Top 10 banks (of which 70% are local) control 90% of the profits. Local banks re-invest profits made to support enterprises in the country. As a result, Kenya’s economy private sector is potent.
For custom analytics and real-time intelligence to see where to cut costs or put more effort to grow, contact us at summitBI Page. Do you sometimes see growth in your portfolio and client base without a corresponding increase in reported profits? You need advanced analytics and revenue assurance services to be in charge of your business rather than relying on ‘printed reports and screenshots’ which may come after having been modified. In this competitive environment, trust after controls.
This is the most detailed analysis of the banking sector based on purely published financial statements by banks in fulfillment of the regulatory requirements. For custom insights to map your bank against the industry, or develop internal data analytics capabilities, contact us.
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