Non-performing loans in Barclays Bank Uganda

Abstract

The study set to assess the impact of non-performing loans in Barclays Bank Uganda Limited. The study was guided by the following objectives; to examine how Barclays banks have ensured that the bank’s loan portfolio has been maintained within acceptable limits to enhance performance, to examine how the bank has ensured compliance with regulatory requirements to enhance its performance and to examine how the bank has worked out problem loans, including rescheduling and restructuring so as to enhance its performance.

The study used a case study research design and both primary and secondary data sources were utilized. The case study design was used because it gives a description behind the results by capturing whatever happened and gives opportunity to highlight and bring attention to particular challenges.

The study findings revealed that Barclays Bank Uganda Limited adequately carries out loan grading this implies the bank keeps track of its outstanding loans with in a given portfolio. The study results revealed that loan portfolio performance at Barclays Bank Uganda Limited was still low, this was due to the high interest rates that the bank levied on its loans which discouraged potential borrowers from obtaining the bank’s loans.

The study indicated that bank loan portfolio quality can be achieved if Barclays Bank Uganda Limited carries out regular reviews of its loan portfolio management for instance constant reviews of the objectives of the Bank in regards to its loan portfolio performance, reviewing interest rate for loans in the portfolio, reviewing loan portfolio performance reports and ensuring that loans are properly graded to minimize default. The study therefore suggests the following areas for further study on Interest rate risk and loan portfolio performance, the impact of inflationary tendencies on interest rate determination and the impact of politics on the level of financial performance.