Uganda has been one of Africa's most strongly performing economies in recent years, posting real GDP growth of 6.4% in 2002, 5.2% in 2003 and 6% in 2004. With inflation also coming under control in 2004 the foundations have been established for a strong banking industry. Additionally, as Fitch Ratings observed when it assigned its B rating to Uganda in March, the country's financial sector has undergone "significant restructuring since the late 1990s and now appears to be fundamentally sound [and] well regulated". Fitch adds that 87% of the banking system's assets are now under the control of foreign houses.
The banking sector turned in a strong performance in 2004, with Standard Chartered posting the most impressive increase in profitability.
Stanbic Uganda posted a 44% increase in net profits in 2004, up from USh28.3 billion to USh40.7 billion ($23.3 million). But with much of the profitability of Ugandan banks a reflection of their high earnings from treasury bonds paying double-digit rates, Stanbic owes its award for best bank in Uganda to the impressive growth in its share of the total market for customer deposits and lending in 2004. Customer deposits rose by 7.5%,