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<strong>UGANDA</strong><br />
Figure 5. Uganda: Financial Sector Developments<br />
Overall, the banking sector remains well-capitalized.<br />
And the banking system’s liquidity ratio<br />
far exceeds the regulatory minimum.<br />
40<br />
35<br />
30<br />
25<br />
20<br />
Selected Financial Sector Indicators<br />
(percent)<br />
Regulatory capital to risk-weighted assets<br />
Regulatory tier 1 capital to risk-weighted assets<br />
Reg. capital target (12%)<br />
Reg. Tier 1 capital target (8%)<br />
40<br />
35<br />
30<br />
25<br />
20<br />
50<br />
40<br />
30<br />
Liquidity Ratio<br />
(percent)<br />
Liquid assets to total deposits<br />
Required liquid assets to total deposits<br />
50<br />
40<br />
30<br />
15<br />
15<br />
20<br />
20<br />
10<br />
10<br />
5<br />
5<br />
10<br />
10<br />
Jun-12<br />
Sep-12<br />
Dec-12<br />
Mar-13<br />
Jun-13<br />
Sep-13<br />
Dec-13<br />
Mar-14<br />
Jun-14<br />
Sep-14<br />
Dec-14<br />
Mar-15<br />
Jun-15<br />
Sep-15<br />
Dec-15<br />
Mar-16<br />
Jun-16<br />
Jun-12<br />
Sep-12<br />
Dec-12<br />
Mar-13<br />
Jun-13<br />
Sep-13<br />
Dec-13<br />
Mar-14<br />
Jun-14<br />
Sep-14<br />
Dec-14<br />
Mar-15<br />
Jun-15<br />
Sep-15<br />
Dec-15<br />
Mar-16<br />
Jun-16<br />
Profitability and earnings remained solid, but have declined<br />
recently…<br />
…mainly due to a sharp rise in<br />
nonperforming loans and provisioning<br />
costs.<br />
5<br />
4<br />
3<br />
Earnings and Profitability<br />
(percent)<br />
Return on assets<br />
Return on equity<br />
Net interest margin (RHS)<br />
50<br />
40<br />
30<br />
80<br />
60<br />
Selected Asset Quality Indicators<br />
(percent)<br />
10<br />
8<br />
2<br />
20<br />
40<br />
6<br />
1<br />
10<br />
20<br />
Specific provisions to NPLs<br />
4<br />
0<br />
Jun-12<br />
Dec-12<br />
Jun-13<br />
Dec-13<br />
Jun-14<br />
Dec-14<br />
Jun-15<br />
Dec-15<br />
Jun-16<br />
0<br />
0<br />
NPLs to total gross loans (RHS)<br />
Jun-12<br />
Sep-12<br />
Dec-12<br />
Mar-13<br />
Jun-13<br />
Sep-13<br />
Dec-13<br />
Mar-14<br />
Jun-14<br />
Sep-14<br />
Dec-14<br />
Mar-15<br />
Jun-15<br />
Sep-15<br />
Dec-15<br />
Mar-16<br />
Jun-16<br />
2<br />
Large exposures have risen over time, while insider lending<br />
is on a declining trend.<br />
5<br />
4<br />
3<br />
2<br />
1<br />
0<br />
Asset Quality: Large Exposures<br />
(percent)<br />
Insider loans to total<br />
capital (LHS)<br />
Large exposures to gross<br />
capital<br />
Jun-12<br />
Sep-12<br />
Dec-12<br />
Mar-13<br />
Jun-13<br />
Sep-13<br />
Dec-13<br />
Mar-14<br />
Jun-14<br />
Sep-14<br />
Dec-14<br />
Mar-15<br />
Jun-15<br />
Sep-15<br />
Dec-15<br />
Mar-16<br />
Jun-16<br />
150<br />
130<br />
110<br />
90<br />
70<br />
50<br />
30<br />
Rising NPLs were concentrated in agriculture, building and<br />
construction, trade and commerce, and transportation and<br />
communication.<br />
Sectoral Contribution to Total NPLs<br />
(percent)<br />
10<br />
9<br />
8<br />
7<br />
6<br />
5<br />
4<br />
3<br />
2<br />
1<br />
0<br />
Agriculture<br />
Building & construction<br />
Transport & communication<br />
Trade & commerce<br />
Other<br />
Jun-12<br />
Sep-12<br />
Dec-12<br />
Mar-13<br />
Jun-13<br />
Sep-13<br />
Dec-13<br />
Mar-14<br />
Jun-14<br />
Sep-14<br />
Dec-14<br />
Mar-15<br />
Jun-15<br />
Sep-15<br />
Dec-15<br />
Mar-16<br />
Jun-16<br />
10<br />
9<br />
8<br />
7<br />
6<br />
5<br />
4<br />
3<br />
2<br />
1<br />
0<br />
Sources: Bank of Uganda and IMF staff calculations.<br />
10 INTERNATIONAL MONETARY FUND
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