According to Ms. Evelyn Anite, the State Minister for Investment, the government has resolved to increase Post Bank’s authorized share capital to Shs500b to allow customers access to low-priced financing and investment in key economic sectors
The government will capitalize Post Bank by at least 400 percent to increase its share capital to Shs500b from Shs100b.
Speaking during the bank’s annual general meeting in Kampala yesterday, Ms. Evelyn Anite, the State Minister for Investment, said the government had resolved that Post Bank’s authorized share capital be increased to Shs500b to allow customers access to low-priced financing and investment in key economic sectors as well as reducing the cost of the bank’s operations.
“Our biggest challenge is access to capital which makes it difficult for anybody to start a business,” she said, noting that whereas the bank had previously been tainted with corruption, changes in management had brought significant growth, elevating Post Bank to a commercial bank.
In the short term, Ms. Anite said, the government will inject Shs50b to meet emerging regulations on minimum capital requirements for banks and continue to lobby for the capitalization of Post Bank’s earnings.
Government, through Post Bank, she added had put in place programs that seek to transform livelihoods, such as the Small Business Recovery Fund, which is available at a 10 percent interest per annum with the financing of up to Shs200m, as well as financing agricultural projects.
In 2020, Post Bank rolled out a transformational plan, in which it restructured a number of operations before attaining a commercial bank license last year. The bank, which is 100 percent owned by the government, has since enhanced operations, and human resources and strengthened its risk framework.
Mr. Andrew Otengo Owiny, the Post Bank chairman, welcomed the move to increase the bank’s capital, noting that it would be utilized to grow Post Bank into a solid financial institution.
In its 2021 integrated report, Post Bank reported a net profit after tax of Shs12.2b, which was a 22 percent increase from Shs10b in 2020 while assets grew to Shs745b. Customer deposits and loans and advances grew by 12.9 percent to Shs507b and 36 percent to Shs454b, respectively.
According to Mr. Julius Kakeeto, the Post Bank managing director, the shift to becoming a commercial bank had given the bank legroom to conduct a number of new service offerings, among which include foreign currency trading as well as building a wide branch network whose operations are supplemented by digital service channels.