More Ugandans embrace banking boosting Deposit Protection Fund's assets by 15%

The financial results were released on January 31, 2023, indicating that the fund's surplus and reserves account increased to Shs989 billion from Shs952 billion. The increase was attributed to a surge in investment income and premium contributions from member institutions totaling Shs144 billion.

The fund's total income increased to Shs218 billion from Shs177 billion. Income from investments increased by Shs26 billion, while income from contributions increased by Shs8 billion.

According to the fund's Chief Executive Officer, Julia Clare Olima Oyet, the banking sector performed well during the period under review with increased deposits.

“The growth in interest income was due to an increase in the size of the investment portfolio while increased deposit levels in the banking sector resulted in higher annual premiums remitted to the fund."

The banking sector's total deposits increased by 6.5 percent to Shs33 trillion from Shs31 trillion in that period. Of these deposits, Shs6.1 trillion (18.4 percent which is higher than the 10 percent benchmark set by the East African Monetary Affairs Committee) were protected.

This performance signals growing confidence in the banking sector among Ugandans, because in the period under review, the total number of bank accounts increased by 8.4 percent from 19.1 million (June 30, 2021) to 20.7 million as of June 30, 2022.

The fund's performance is also attributed to a significant decrease in operational costs from Shs20 billion to Shs6 billion. However, this was after the fund recovered an Shs11 billion tax from Uganda Revenue Authority.

“Overall, the cost-to-investment income ratio stood at 10% which was below the approved board limit of 25%,” the CEO said.

Deposit Protection Fund headquarters Pulse

The DPF is a Uganda government agency responsible for the compensation of depositors with up to Shs10 million in the event of bank closure. It was established in 2016 under the Financial Institutions Amendment Act (2016).