Ugandan stress tests reveal banking sector vulnerabilities

Uganda shillings

The results from the Bank of Uganda’s 2016 stress tests have revealed large vulnerabilities in the country’s banking system.

Under a scenario where the three largest borrowers default, with a loan loss of 100%, 13 banks would become undercapitalised, according to the tests. These “large potential losses” would ultimately cause the banking system a loss of 514 billion Ugandan shillings ($143 million) were they to be realised, the central bank says.

In a second scenario, the central bank found

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