Centenary Bank Launches Custodial Services to Bolster Uganda's Financial Market

Key facts

• Centenary Bank launched its custodial services on Tuesday, May 5, 2026.
• The bank manages total assets exceeding Shs 8.6 trillion.
• Uganda's retirement benefits sector holds an estimated Shs 30 trillion in assets.
• Over 80 percent of investments in Uganda are concentrated in government securities.
• Centenary Bank has a customer base of 3.4 million.
• Custodial services are increasingly becoming mandatory for insurance firms offering guaranteed funds.

Centenary Bank Enters Custodial Services Market

Centenary Bank has officially entered Uganda's burgeoning custodial services sector, marking a significant step in the nation's financial market development. The launch, which took place on Tuesday, May 5, 2026, at Mestil Hotel in Kampala, positions the bank as the seventh institution to offer these crucial services. With total assets surpassing Shs 8.6 trillion and a loan book exceeding Shs 4 trillion, Centenary Bank brings substantial financial weight to this specialized area. The introduction of custodial services is seen as a vital component for safeguarding assets and fostering confidence within the financial system. These services are designed to protect ownership, validate transactions, mitigate risks, and ultimately sustain market trust. Governor Michael Atingi-Ego of the Bank of Uganda underscored their importance, particularly highlighting existing gaps within the pension sector. This expansion by Centenary Bank is not merely a corporate milestone but is anticipated to act as a catalyst for Uganda's broader economic transformation. The bank's established presence, supporting over 300,000 enterprises across the country, provides a strong foundation for its new venture into custodial operations.

Strengthening Investor Confidence and Market Infrastructure

Governor Michael Atingi-Ego of the Bank of Uganda lauded the launch of CenteCustody Services, describing it as a "landmark moment" for Uganda's financial system. He emphasized that sustained economic growth hinges on the strength, reliability, and credibility of financial institutions and their supporting infrastructure. Custodial services, built fundamentally on trust, are essential for the efficient functioning of markets. Transparency, accountability, and investor protection are identified as paramount in building confidence among both local and institutional investors. The new service from Centenary Bank aims to address these needs by enabling clients to manage a diverse range of financial assets, including government securities, equities, retirement assets, collective investment schemes, and corporate instruments, all through a unified platform. Fabian Kasi, Managing Director of Centenary Bank, stated that the product responds to evolving investor needs and long-term financial planning. He framed the launch as a "promise for the future," aiming to build a system that securely holds and grows wealth for current investors, institutions, and future generations. This initiative reinforces the bank's commitment to supporting governance structures and deepening financial markets.

Addressing Market Concentration and Expanding Reach

A significant concern raised by regulators is the over-concentration of investments within Uganda, with over 80 percent tied up in government securities. This limits the diversification crucial for developing mature capital markets. Ms. Linda Daisy Nabakooza, Chief Manager at the Uganda Retirement Benefits Regulatory Authority, urged Centenary Bank to leverage its extensive customer base of 3.4 million to extend retirement coverage beyond urban centers, particularly to underserved rural populations. Nabakooza stressed that governance is the bedrock of the entire financial ecosystem, and any lapse directly impacts the ordinary Ugandan saving for retirement. The Insurance Regulatory Authority's Mr. Musa Ssebufu noted that custodial services are becoming increasingly mandatory, especially for insurance firms offering guaranteed funds, requiring adherence to pillars of trust, transparency, accountability, and customer protection. Benoni Okwenje, General Manager for Financial Markets at Centenary Bank, highlighted that the bank's nationwide reach will be instrumental in extending custody services beyond metropolitan areas. This will simplify access and onboarding into formal investment systems for institutional investors across the country, thereby unlocking opportunities for a broader segment of the population.

The Role of Technology and Regulatory Frameworks

The shift from manual to automated custody systems has demonstrably enhanced risk management and innovation for institutions that have adopted this transition early. Mr. Mubaale Mugalya, General Manager at Sanlam Allianz, described automated custody as both a regulatory requirement and a strategic enabler for growth and product innovation. This technological advancement is central to the modern financial landscape. Strong regulatory and governance frameworks remain indispensable for ensuring transparency, asset protection, and reliable reporting. Custodial services play a pivotal role in supporting long-term savings by facilitating secure investments in instruments such as government bonds and equities. This integration of technology and robust regulation is key to building a resilient financial sector. The overall push within Uganda's financial sector is towards deepening capital markets, bolstering institutional trust, and expanding access to structured investment products. Centenary Bank's entry into custodial services aligns with this broader strategic objective, aiming to modernize the financial infrastructure and encourage greater participation.

The bottom line

• Centenary Bank's launch of custodial services aims to enhance the security and transparency of asset management in Uganda.
• The move is expected to strengthen investor confidence and bolster the country's financial market infrastructure.
• Regulators are urging the bank to leverage its extensive network to expand financial inclusion, particularly in rural areas.
• A significant portion of Ugandan investments remain concentrated in government securities, highlighting a need for diversification.
• Custodial services are increasingly becoming a mandatory requirement for financial institutions, especially in the insurance sector.
• The adoption of automated custody systems is crucial for improving risk management and fostering innovation.