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Uganda  Stanbic fee waiver signals shift in revenue streams ABW
 

Stanbic Bank customers are to benefit from cheaper transaction costs following the financial institution's move, the first of its kind in the industry, to scrap fees for depositing money into an account.

Kampala

Stanbic Bank customers are to benefit from cheaper transaction costs following the financial institution's move, the first of its kind in the industry, to scrap fees for depositing money into an account.

The move to scrap the Shs2,000 cash deposit fee is expected to cause similar reactions from other players in the industry, make the banking more competitive and stimulate growth in cash deposits, which have been slowed by the charge, according to Mr Henry Lugemwa, the bank's head of business banking.

"Customers are depositing money with us but the volume is not to the level that we think it should be ,given our vast current branch network - over 90 branches across the country - we want to boost that," Mr Lugemwa said at a media briefing in Kampala yesterday. He added that although the fee seems little for customers who carry out a single transaction monthly, it is expensive for those that conduct about 10 deposit transactions per day such as business people.

"The money spent on cash deposit fees for a business person who does over 10 deposits in a day if added up after a month is higher than what customers pay as interest fees on loan repayment," Mr Lugemwa said, responding to the question whether scrapping cash deposit fees is a more pressing need to customers than reducing interest rates on loans.

Mr Ronald Kamulegeya, the bank's head for SME banking said cash deposit fees have been a major "pain point for customers" who requested the bank to do something about it. Cash deposit fees is one of the ways through which commercial banks make money, and the charge usually varies from one institution to another. The removal of cash deposit fees is expected to boost Stanbic's deposit mobilisation drive.

Low depositsMost banks suffered low deposits into their systems during the days of double digit inflation and high lending rates, resulting into liquidity challenges which the banking industry is yet to fully recover from.

Stanbic's move, the first of its kind in the industry, is expected to trigger other players to respond in a similar way to remain competitive. Most banks, however, offer free (Automated Teller Machine) ATM cash deposits.

fkulabako@ug.nationmedia.com

http://www.monitor.co.ug

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Stanbic Bank Uganda Limited | Uganda Stock Exchange | SBU Thursday, Sep 18, 2014 
Close Price (UGS)
33.00
Open (UGS)
NA
High (UGS)
33.00
Low (UGS)
33.00
Change (UGS) [% Change]
+0.00 [+0.0000%]
Volume
21,628,299
Value (UGS)
713,733,867.00
Deals
14
52 Week High (UGS)
NA
52 Week Low (UGS)
NA
YTD High (UGS)
NA
YTD High (UGS)
NA
EPS (UGS)
NA
P/E Ratio
NA
Shares Outstanding
51,188,669,700
Market Cap (UGS)
1,689,226,100,100.00
 
 
NA = Not Available
 
Uganda Stock Exchange
Top 5 % Gainers 18 Sep
Name Close Chg % Chg
Stanbic Bank Uganda Ltd 33.00 +0.00 +0.00%
 
Top 5 % Losers 18 Sep
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