KAMPALA, July 30 (Xinhua) -- Uganda's central bank said on Monday that the banking industry posted a strong financial performance in the last quarter with bad loans decreasing.
Emmanuel Tumusiime-Mutebile, governor of Bank of Uganda, said in a statement that data by the end of June showed that the ratio of non-performing loans to total loans was 4.4 percent, down from 5.3 percent at the end of March.
"We have now observed five consecutive quarters of improving financial performance among banks, driven primarily by stronger loan quality. As such, we can say that the rise of non-performing loans that hit the banking sector in 2016 has abated," he said.
Mutebile said the banking industry has strong capital and liquidity buffers, which provide a solid platform for expanding intermediation in the year ahead.
The annual growth of bank lending to the private sector accelerated to double-digit rates in the second quarter of 2018, for the first time since 2015.
The central bank chief said after a difficult period in 2016, economic growth has rebounded, inflation is low and stable, and the overall performance of the banking sector has improved.
"I believe that we have strong grounds to be optimistic about the future of our banking industry, especially if we remain vigilant and resilient against the emerging risks," he added.
Mutebile called on banks to put more effort in maintaining public confidence in the banking system and avoid sending fraudulent information to competitors while promoting certain services and products.
One of Uganda's major commercial banks was recently subject to a series of allegations on social media platforms concerning changes in its ownership structure, governance, and liquidity position.
The central bank said the allegations against DFCU Bank were false.
