Annual Report & Financial Statements 2015 STANBIC BANK UGANDA LIMITED Stanbic Bank Stanbic Bank Uganda Limited Annual Report and Financial Statements for the year ended 31 December, 2015 1 “How do we grow in this dynamic market?” “By choosing a partner who knows it.” To realise your ambitions, you need the right partner by your side, with the end-to-end business solutions to see things through. Whatever your opportunities or challenges, we have the local insight and on-the-ground expertise to meet them with you. Isn’t that what partnership is about? www.stanbicbank.co.ug Corporate and Investment Banking Stanbic Bank Stanbic Bank Uganda Limited Annual Report and Financial 2 Statements for the year ended 31 December, 2015 Our success and growth over the long term is built on making a difference in the communities in which we operate. We are committed to moving Namibia forward. Our Report This report is the Stanbic Bank Uganda Limited (SBUL) annual report and includes financial and non-financial information. The financial results and commentary describe the results of Stanbic Bank Uganda Limited (SBUL).SBUL is a majority owned subsidiary of Standard Bank Group and is locally incorporated in Uganda. Contents ABOUT STANBIC BANK UGANDA LIMITED Who we are 04 Our vision and values 06 How we create value 08 Our products and services 09 Our locations 10 BUSINESS REVIEW Provides a financials review of the bank and its environment Financial definition 11 page 11 2015 Highlights 12 Chairman’s statement 14 Chief executive’s statement 16 Operating and financial review 21 Our KPIs and strategy roadmap 23 Business unit review 26 RISK REVIEW Risk management and control 31 Presents a balanced and comprehensive analysis of the bank’s sustainability SUSTAINABILITY performance in relation to issues material to the bank and stakeholders Citizenship & sustainability report 36 page 36 CORPORATE GOVERNANCE Board of directors 50 Executive committee 51 Corporate governance statement 52 Remuneration report 56 Report of the audit committee 59 Directors’ report 61 Statement of directors’ responsibilities 62 Independent auditor’s report 63 Sets out the full audited annual financial FINANCIAL STATEMENTS & NOTES statements for Stanbic Uganda Ltd Income statement 64 page 64 Statement of comprehensive income 65 Statement of financial position 66 Statement of changes in equity 67 Statement of cash flows 69 Notes to the financial statements 70 SUPPLEMENTARY INFORMATION Shareholders analysis 118 Shared holder information 119 Contact details 121 Stanbic Bank Uganda Limited Annual Report and Financial Statements for the year ended 31 December, 2015 3 ABOUT STANBIC BANK UGANDA LIMITED Who we are A brief history of our Bank The Bank was founded in Uganda as the National Bank of India in 1906. After several name changes, it became Grindlays Bank. In 1991, Standard Bank Group (the Group) bought the Grindlays Bank network in Africa. The new owners renamed the Ugandan subsidiary, Stanbic Bank (Uganda) Limited. In February 2002, The Group acquired 90% of the shareholding in Uganda Commercial Bank Limited, a government- owned retail banking operation with sixty five branches. The Group merged their new acquisition with the existing Stanbic Bank (Uganda) Limited, to form Uganda’s largest commercial bank by assets and branch network. In November 2007, the Government of Uganda divested its ownership in Stanbic Bank (Uganda) by listing its shares on the Uganda Securities Exchange. The Group also floated 10% of its shareholding at the same time, reducing their ownership to 80%. Stanbic Bank Uganda Limited Annual Report and Financial 4 Statements for the year ended 31 December, 2015 ABOUT STANBIC BANK UGANDA LIMITED Our Bank (as at 31 December, 2015) NUMBER OF CUSTOMERS 585,111 SERVED BY 1,899 EMPLOYEES THROUGH OUR Personal and Business Banking MAIN BUSINESS & Corporate and Investment UNITS Banking LISTED On the Uganda Securities Exchange (USE) on the 25th of January 2007 MARKET 1,638 billion CAPITALISATION (THE LARGEST BANK BY THIS MEASURE IN UGANDA) SHAREHOLDERS 22,720 HEADQUARTERS Kampala, Uganda Stanbic Bank Uganda Limited Annual Report and Financial Statements for the year ended 31 December, 2015 5 ABOUT STANBIC BANK UGANDA LIMITED “To be the leading African financial services Our organisation in, for and across Africa, delivering vision exceptional client experiences and superior value.” Purpose “Transforming lives for a better Uganda” statement Serving our customers We do everything in our power to ensure that we provide our customers with the products, services and solutions to suit their needs, provided that everything we do for them is based on sound business principles. Growing our people We encourage and help our people to develop to their full potential and measure our leaders on how well they grow and challenge the people they lead. Delivering to our shareholders We understand that we earn the right to exist by providing appropriate long-term returns to our shareholders. We try extremely hard to meet our various targets and deliver on our commitments. Being proactive We strive to stay ahead by anticipating rather than reacting, but our actions are always carefully considered. Working in teams We, and all aspects of our work, are interdependent. We appreciate that, as teams, we can achieve much greater things than as individuals. We value teams within and across business units, divisions and countries. Constantly raising the bar We have confidence in our ability to achieve ambitious goals and we celebrate success, but we must never allow ourselves to become arrogant. Respecting each other We have the highest regard for the dignity of all people. We respect each other and what Stanbic Bank stands for. We recognize that there are corresponding obligations associated with our individual rights. Upholding the highest levels of integrity Our entire business model is based on trust and integrity as perceived by our stakeholders, especially our customers. Stanbic Bank Uganda Limited Annual Report and Financial 6 Statements for the year ended 31 December, 2015 ABOUT STANBIC BANK UGANDA LIMITED Our values Serving our customers We do everything in our power to ensure that we provide our customers with the products, services and solutions to suit their needs, provided that everything we do for them is based on sound business principles. Growing our people We encourage and help our people to develop to their full potential and measure our leaders on how well they grow and challenge the people they lead. Delivering to our shareholders We understand that we earn the right to exist by providing appropriate long-term returns to our shareholders. We try extremely hard to meet our various targets and deliver on our commitments. Being proactive We strive to stay ahead by anticipating rather than reacting, but our actions are always carefully considered. Working in teams We, and all aspects of our work, are interdependent. We appreciate that, as teams, we can achieve much greater things than as individuals. We value teams within and across business units, divisions and countries. Constantly raising the bar We have confidence in our ability to achieve ambitious goals and we celebrate success, but we must never allow ourselves to become arrogant. Respecting each other We have the highest regard for the dignity of all people. We respect each other and what Stanbic Bank stands for. We recognize that there are corresponding obligations associated with our individual rights. Upholding the highest levels of integrity Our entire business model is based on trust and integrity as perceived by our stakeholders, especially our customers. Stanbic Bank Uganda Limited Annual Report and Financial Statements for the year ended 31 December, 2015 7 ABOUT STANBIC BANK UGANDA LIMITED How we create value We deploy and maintain the integrity of banking infrastructure We allocate capital to support economic growth (see product details on the next page) We provide access to Financial Services (see details on the next page) STANBIC BANK Personal & Corporate & Other Business banking Investment Banking Provides banking and other financial Provides corporate and investment FINANCE services to individual customers and banking services to governments, Measuring and managing financial small- to medium-sized enterprises. parastatals, larger corporates, financial performance. institutions and international counterparties. HUMAN RESOURCES Acquiring, developing and retaining talent. WHAT WE OFFER WHAT WE OFFER TECHNOLOGY AND OPERATIONS Providing the infrastructure and support for the Bank to effectively Trade Finance Savings and Investments and efficiently carry out its activities. Cash Management Lending (Personal) RISK Upholding the overall integrity of Investor Services the Bank’s risk/return decisions; Trade Finance ensuring that risks are assessed and Investment Banking (IB) controlled in accordance with the Lending (Business) Bank’s standards and risk appetite. Global Markets COMPLIANCE Project Finance Ensuring the Bank’s activities and conduct comply with legal and regulatory requirements. Ushs 38.9 billion Ushs 97.0 billion TREASURY & CAPITAL Profit After Tax Profit After Tax MANAGEMENT 2014: Ushs 23.8billion 2014: Ushs 99.8billion Managing the Bank’s capital and liquidity, including ensuring we meet regulatory requirements and have sufficient capacity 2015 2014 2015 2014 of capital. Return on equity 24.9% 15.1% Return on equity 53.3% 61.9% LEGAL Cost-to-income ratio 69.9% 73.4% Cost-to-income ratio 35.0%