* Stanbic bond to raise long term capital for lending
* Bond to be between seven to ten years, not confirmed
* Weak shilling likely to hit dollar-denominated loans
By Elias Biryabarema
KAMPALA, June 8 (Reuters) - Stanbic Bank Uganda (SBU) , the east African nation's largest bank by assets, plans to issue a corporate bond by year end to support long term lending, its CEO said on Monday.
A unit of South Africa's Standard Bank and listed on the Uganda Stock Exchange, SBU has only previously issued seven-year notes worth 30 billion shillings ($10 million) in 2009.
"We're doing it just for capital, so that we have tier two capital ... long term capital. For banks that's an important thing because it allows us to lend more out," Chief Executive Patrick Mweheire told Reuters.
He said the tenure for the planned bond would be between seven to ten years and that although the debt's size was not yet agreed, it "will probably be large."
A decision on whether the bond's rate will be fixed or floating were also still ongoing, he said.
Although the bank's 2009 bond was sold to few selected investors, participation in the new bond would be open, he said.
SBU signed a syndicated, 18-month loan of $85 million earlier this year to back lending for trade-related finance mainly in the energy, manufacturing and infrastructure sectors.
Mweheire, though, said corporate bonds were better as they were not subject to onerous reporting and regulation procedures and also helped connect the bank to a broad array of investors as opposed to a loan that can financed by one or few lenders.
The bank lifted its 2014 pretax profits by 34 percent to 181.3 billion shillings compared with the previous year, boosted by a surge in interest income.
Mweheire forecast the bank would maintain its improving performance this year but the Ugandan shilling's depreciation could hit its dollar-denominated loan business.
The shilling has lost about 11 percent of its value so far this year, mostly sapped by strong corporate demand and concerns over a weakening current account deficit.
"People are beginning to get a little bit more cautious about taking dollar (loans) exposure," Mweheire said.
$1 = 3,108.0000 Ugandan shillings Editing by James Macharia