Core Insights - The latest financial stability report from the Bank of Uganda indicates that commercial banks' after-tax net profits are projected to reach 1.689 trillion shillings by March 2025, driven by loan growth and economic recovery [1] - Systemic financial risks are easing despite ongoing global uncertainties, enhancing banks' capital adequacy and attracting investments to support economic development [1] Banking Sector Performance - The profit of credit institutions stands at 9.7 billion shillings, while microfinance deposit-taking institutions (MDIs) saw profits surge from 1.7 billion to 21.2 billion shillings year-on-year [1] - The core capital adequacy ratios are robust, with commercial banks at 25.4%, credit institutions at 26.7%, and MDIs at 43.4%, all significantly above regulatory minimum requirements [1] Digital Finance Growth - Digital payments are on the rise, with RTGS transaction volume and value increasing by 22.3% and 21.6% respectively, while electronic transfers grew by 3.4% [1] - Mobile payments have shown strong performance, with active accounts increasing by 166% to 33.7 million, and transaction volume and value rising by 20.9% and 25.5% respectively [1] - Notably, 92.2% of transactions are small transactions below 50,000 shillings, highlighting the role of digital finance in promoting financial inclusion [1] Loan and Agency Growth - Digital loans have surged to 2.9 trillion shillings, with over 102 million loans disbursed, and the number of agent banking service points increased by 48.7% [1] - However, the active agent ratio has declined due to commission disputes [1] Sovereign Debt Exposure - Financial institutions' exposure to sovereign debt has slightly increased to 30.4%, but overall capital levels remain strong, supporting both public and private investment capabilities [1]