Bank of Uganda has conducted stress tests on five banks last year to test their resilience, The Monitor newspaper reported, citing Deputy Governor Michael Atingi-Ego. 

The stress tests were conducted on important domestic banks to ensure they were safe and sound and could support the economy through different shocks. 

Stress tests are conducted on banks to determine if they have enough capital and can withstand shocks. 

Atingi-Ego said the tests returned “positive”, noting that the resilience had been built over the years following the 2007-08 financial crisis. 

In its 2020 annual supervision report, the Bank of Uganda said that the five domestic banks are Stanbic, Standard Chartered, Centenary, dfcu and Absa. 

They jointly hold at least 57% of banking sector assets and their soundness is an indicator of the wider health of the banking sector. 

The banking official indicated that Covid-19 had presented policymakers and financial markets regulators with the first major test of the post-financial crisis reforms requiring prudent and balanced management of the economy to mitigate existing challenges. 

Elsewhere, Atingi-Ego stated that the banking sector must leverage a growing trend of financial technology to tap into infinite possibilities. 

(Editing by Seban Scaria seban.scaria@lseg.com )