Uganda’s banking industry Non-Performing Loans (NPLs) reduced to Shs1.019 trillion in 2024, down from Shs1.18 trillion recorded in 2023, Business Focus exclusively reports. Although 10 banks have high NPLs (whose ratio is above 5%), the industry NPL ratio is 4.69%.This analysis is derived from the financial statements for the year ended 31st December 2024 that banks have been publishing lately. It’s important to note that banks are compelled to publish their financials for the previous year (in this case 2024) before May of the following year.Uganda currently has 22 fully fledged commercial banks. This is after three banks including ABC Capital Bank, Opportunity Bank and Guaranty Trust Bank downgraded from a Tier I Commercial Bank License to a Tier II Credit Institution License effective July 1, 2024.The three banks failed to meet Bank of Uganda’s new minimum capital requirement of Shs150bn, resulting into the downgrade. The paid-up capital for tier II credit institutions is Shs25bnThis website has exclusively analyzed the financial results so as to help customers, partners, policy makers and stakeholders of these financial institutions to know how their banks performed as well as help them make informed decisions.ALSO READ: Exclusive: Banking Industry Assets Hit Shs53 Trillion As Top 10 Banks Control 81.24% Of The Market ShareBanks Swim In Shs1.6 Trillion Profit: Top 5 Control 74.46% Of Industry Profits As Uganda’s Most Profitable Banks RevealedEXCLUSIVE: Ugandans Borrowed Shs21.46 Trillion In 2024 As Biggest Lenders RevealedIn this article, the focus is on NPLs, one of the key performance indicators for banks.A Non-Performing Loan (NPL) is a loan in which the borrower is in default and hasn’t made any scheduled payments of principal or interest for a certain period of time.In banking, commercial loans are considered nonperforming if the borrower is 90 days past due.NPLs are subject to late repayment or are unlikely to be repaid by the borrower.Importantly, NPLs can tie up a bank’s capital, reduce its profitability, and damage its reputation.The Bank of Uganda (BoU), the regulator of the banking sector, considers NPLs to be high if the NPL ratio is above 5%.NPL ratio is the ratio of the amount of NPLs in a bank’s loan portfolio to the total amount of outstanding loans the bank holds.Banks with Most Non-Performing Loans Equity Bank has the highest NPL ratio of 16.6%. This is after its NPLs reduced to Shs216.01bn in 2024, down from Shs363.97bn in 2023. Its loans advanced to customers was recorded at Shs1.3 trillion in 2024.Equity Bank Managing Director, Gift Shoko and his team are putting up measures to reduce NPLs and grow the bank. This explains why the bank returned to profitability. The lender recorded Shs20.14bn net profit in 2024, from Shs18.77bn loss recorded a year earlier.Cairo Bank Uganda also has high NPLs. Cairo’s NPL ratio is 12.36%. This is after Cairo recorded Shs22.12bn in NPLs in 2024, down from Shs34.29bn in 2023. Its loans advanced to customers in 2024 stand at Shs178.9bn.Absa Bank Uganda is the 3rd bank with biggest loan defaulters. Its NPL ratio is 10.64%. The bank’s NPLs increased to Shs211.8bn in 2024, up from Shs175.2bn in 2023. This is against Shs1.99 trillion Absa recorded in loans advanced to customers.It is followed by Diamond Trust Bank with NPL ratio of 7.18%. This is after its NPLs increased to Shs64.81bn in 2024 from Shs17.4bn in 2023. This is against Shs902.21bn worth of loans that the bank extended to customers.Tropical Bank also has high NPLs with NPL ratio of 6.83%. The lender’s NPLs reduced to Shs7.89bn in the year under review, from Shs13.96bn in 2023. This is after the bank extended loans worth Shs115.43bn to customers.It is followed by Housing Finance Bank with NPL ratio of 6.52%. This is after its NPLs increased to Shs70.9 bn in 2024, up from Shs57.38bn in 2023. The bank’s loans advanced to customers stood at Shs1.08 trillion in 2024.I&M Bank also has high NPLs with a ratio of 6.52%. The lender’s NPLs reduced to Shs26.53bn in the year under review, from Shs41.47bn recorded in 2023. Its loans advanced to customers in 2024 is Shs406.9bn.It’s followed by KCB Bank with NPL ratio of 6.17%. This is after its NPLs increased to Shs55.78bn in the year under review from Shs40.96bn in 2023. The bank’s loans advanced to customers in 2024 stood at Shs903.45bn.PostBank completes the list of banks with NPL ratio above 5%. Its NPL ratio is 5.65%. This is after its NPLs increased to Shs40.61bn in 2024, up from Shs26.54bn in 2023. Its loans advanced to customers in 2024 stood at Shs718.65bn.Banks with small NPLsBanks whose NPL ratio is below 5% include; Bank of Baroda (0.20%), Ecobank (0.46%), United Bank for Africa (0.55%), Bank of India (0.84%), Stanbic Bank (1.6%), Bank of Africa (2.32%), Centenary Bank (2.72%), Exim Bank (2.85%), Standard Chartered (3.13%), Finance Trust Bank (3.67%), NCBA (3.97%) and Dfcu Bank (4.5%).We’ll continue giving you unmatched analysis about the performance of banks in 2024 and beyond. For tips, opinions and advertising, Tel: 0775170346/0703828741/staddewo@gmail.com. Follow us on Twitter: @TaddewoS @BusinessFocusug The post Uganda’s Banks With Biggest Loan Defaulters Named As Customers Fail To Repay Shs1 Trillion appeared first on Business Focus.