Following last month’s announcement of a further reduction in the Central Bank Rate CBR by 100 basis points (1%) by the Bank of Uganda Governor Tumusiime Mutebile, Stanbic Bank Uganda’s leading financial services institution has announced it will match the movement by reducing its prime lending rate from 23% to 22% effective the 1 st of October 2016.
This is the third time in the last six months Stanbic bank has reduced its Prime Lending Rate in response to adjustments in the CBR.
“As we stated at the release of our half year financials last month, Stanbic is committed to maintaining the transparency of our pricing to our customers, this is the reason why we track movements of the CBR and revise our rates accordingly” said Patrick Mweheire the Chief Executive of the Bank. “We believe that the more affordable it is for our customers to pay back the money we lend to them for personal and business purposes the more value they will be able to create from their borrowings and the less likely they will be to default on their re-payments” This has a positive effect on the overall economy and enhances domestic growth through stimulating private sector credit growth.
In the first half of the year Stanbic reported a commendable credit loss ratio of just 1.6% which is well below the industry average that currently stands at close to double figures.
“This is the result of the strength of our credit lending framework that have resulted in the strong quality of our loan book” The Chief Executive revealed.
Talking about whether the bank is likely to further reduce its PLR again before the end of the year Mr. Mweheire noted that the bank would continue to track any future changes to the CBR in line with the bank’s committed stance and any further drops in CBR would result in continued drops to the Stanbic’s PLR.
