Financial Sector Stability: Managing Risk in a Growing & Fast Changing Environment AD UBA Executive Committee 2018-2019 Patrick Mweheire (Chairman) Chief Executive Officer Stanbic Bank Uganda Rakesh Kumar Jha (Vice Chairman) Sarah Arapta (Honorable Auditor) Managing Director Barclays Bank Uganda Limited Chief Executive Officer Citibank Mathias Katamba Uganda Bankers Association (Honourable Treasurer) Wilbrod Humphreys Owor (Executive Director) Managing Director Housing Finance Bank Contents 4. Chairman UBA Foreword 5. ED UBA Foreword 6. ABC 2018 Agenda 7. ABC 2018 Speakers and Presenters’ Profiles 8. ABC 2018 Sponsors, Partners 10. Minister of Finance Interview 11. Governor BOU Statement 15. UBA Mandate- Vision, Mission, Values, Functions 16. UBA Members Published by: Contents 19. UBA Executive Committe 21. Tightening the Banking “Seat belt” 18. ABC 2017 Key Highlights 30. Virtual Currencies 31. Financial Sector Deepening 32. Volatility of Bank Assets in Uagnda 33. Sources of commercial Bank Risks 34. Willful loan defaulters Published by: ontents C Advertisers Published by: Contents Advertisers wehavetheanswers.co.za Or contact us +27 11 775 3045 Published by: UBA Chairman Foreword welcome you all to the second Annual Banking Conference (ABC) 2018. I take this opportunity to thank all our partners, the members of UBA and all our stake- holders for efforts rendered in organizing and making this conference a success. The context for our 2018 theme arises from trends in the recent past, where the banking & overall financial sector has witnessed a number of developments emanat- Iing from both domestic and external factors. Externally, there is growing uncertainty arising from the shifting geopolitical agenda, skewed towards protectionism, creating an unpredictable environment for players in the financial sector who provide the much-needed financing for cross border opera- tions of multinational companies. In addition, technological innovations have aided the creation of new digital platforms that present new opportunities, enable reach to previously unserved market segments, widen choices and are available 24/7, but equally present risks that exist in the ICT space. Financial Institutions are increasingly depending on ICT for critical aspects of their operations and risks in ICT therefore mean risks to the stability of the financial sector. Managing Risk positive developments including the in A Growing & amendment of the Financial Institutions Act 2004 and other related legislation Fast Changing have strengthened risk management Environment, and provided the environment for the introduction of new products is very relevant and services while increasing reach & to industry penetration of financial services. These developments create especially now. opportunities for growth as well as disruptions in different magnitudes. Instability in the financial sector can have far reaching consequences to the The Global Financial Crisis of 2008 wider economy by negatively affecting proved to us how far reaching investment, trade, incomes and has the the consequences of instabilities potential of exacerbating poverty and in the financial sector can be. income inequality. The subtheme, Managing Risk in A Growing & Fast Changing It is my wish that through this Environment, is very relevant to conference, we will be able to come industry especially now. up with practical recommendations to enable us deliver stable growth The Fourth Industrial Revolution for the sector anchored on positive is upon us and technology is innovations. fundamentally altering the way people work, live and relate to one another. Allow me take this opportunity to This is also altering the way we thank the Central Bank of Uganda and conduct business or deliver services Government of Uganda for providing to customers. Customer expectations the enabling regulatory as well as have also been altered. Today’s overall business environment for the customers, not only expects a 24/7, sector to thrive. We count on and look efficient and reliable service, they also forward to their continued support. want re-assurance that the financial sector is sound, resilient, stable and safe. Domestically, the financial sector has Patrick Mweheire witnessed stress in the recent past Chairman leading to closure of some financial institutions. However, numerous other UBA Executie Director Foreword take this opportunity to welcome you to our second Annual Bankers’ Conference (ABC 2018). The theme this year “FINANCIAL SECTOR STABILITY: Managing Risk in a Growing & Fast Changing Environment” is at the core of UBA’s mandate Iof fostering the growth of a strong, vibrant & respected financial services industry in Uganda. The Annual Bankers Conference (ABC) now an annual UBA event, seeks to bring together regulators, practitioners & various industry experts from international, regional and national spheres involved in facilitating and delivering financial and banking services, to discuss issues, trends, drivers and the dynamics that are increasingly shaping sustainability strategies in banking, finance & the overall development eco system. At our first conference last year 2017, we deliberated on the future of banking, noting that the emergence of Digital Financial Services (DFS) provide an effective and efficient platform for financial institutions to leverage on for growth. DFS provides a game-changing environment that cuts across all the sectors of the economy and across market segments including the informal markets, most importantly aiding financial inclusion through improved access to financial services and lowering the cost of financial ...balancing services. financial, The conference also discussed ways and means of addressing the gaps and shortages social and surrounding the much needed long term finance in our markets. environmental issues, to ensure Sustainable and responsible banking sustainable was another key discussion area, where balancing financial, social and livelihoods for environmental issues, to ensure sustainable livelihoods for the communities from which the communities we derive business was well highlighted. from which we The discussions noted that integrating social and environmental criteria derive business... into lending decisions, ensuring good governance, building more inclusive lending (especially supporting SMEs) protecting the environment, being transparent and acting with integrity are critical aspects of sustainable and responsible banking. We invite you to enrich this gathering by actively participating We convey our gratitude to the Vice and contributing to the President Republic of Uganda H.E Edward deliberations as we strive to build Kiwanuka Sekandi who presided over the a strong and resilient financial opening of the Conference and the Minister services sector in Uganda. for Finance, Hon Matia Kasaija for presiding over the closing. I cannot conclude without conveying our deep gratitude to We thank our 2017 Keynote Speaker Professor Njuguna Ndungu (Governor all the participants, stakeholders Emeritus), all the speakers, panelists, and sponsors who continue to authors and moderators who anchored the support us in delivering this conference. conference. This year’s conference will aim to We look forward to a resourceful deliver constructive discussions and conference. recommendations on a range of subject matters affecting the performance and stability of the banking industry at the Wilbrod Humphreys Owor, global, regional as well as national level. Executive Director ABC 2018 Agenda 8.00 am 8.50 am Registration Opens Welcome and setting the scene UBA Chairman- Mr. Patrick Mweheire 9.00 am 9.30am Remarks by BOU Governor Remarks by Guest of Honor Proff. Emmanuel Tumusiime Prime Minister of the Mutebile Republic of Uganda 9.50am 10.35am Keynote Address 1 Coffee Break Topic: Coping with the Risk Elements in Networking and Refreshments dynamics driving change in the Banking & Financial Environment Globally 11.00am 1.00pm Panel Session 1 and Q&A Lunch break Moderator Networking and Refreshments ABC 2018 Agenda 2.30pm 3.00pm Key Note Address 2 Panel Session 2 and Q&A Topic: Recent Bank Resolution Moderator Experiences and Lessons Therein 5.00pm 6.00pm Conference Wrap up Closing Remarks Recognition and awards, Mr. Robin Kibuuka- Chairman Standard Recognition of Sponsors, Awards to Authors, Photo session Chartered Bank/Board Member PSFU ED UBA- Mr. Wilbrod Humphreys Owor 6.30pm Evening Cocktail/ Entertainment Published by: r. Rugunda was appointed as Prime Minister on 18 Sep- tember 2014. A physician by profession, he has held a long series of Cabinet posts under DPresident Yoweri Museveni beginning in 1986. He served as Uganda’s Minister of Foreign Affairs from 1994 to 1996 and as Minister of Internal Affairs from 2003 to 2009. Subsequently, he was Permanent Representative to the United Nations from 2009 to 2011 and Minister of Health from 2013 to 2014. Dr Rugunda joined the Makerere Universi- Dr. Ruhakana ty Medical School and later the University Rugunda of Zambia where he studied medicine, Prime Minister, graduating with a Bachelor of Medicine Republic of Uganda and Bachelor of Surgery. He later studied at the University of California, Berkeley and obtained a Masters of Science in pub- lic health. Before joining Ugandan politics, Rugunda worked as medical officer in Zambia, as a physician at the District of Columbia General Hospital in Washington, D. C. and at Kenyatta National Hospital in Nairobi, Kenya mmanuel Tumusiime-Mutebile is a Ugandan economist and banker.