DFCU Chairman, Jimmy D. Mugerwa (right) presiding over the virtual AGM yesterday at Serena Hotel.
DFCU Limited has assured shareholders that the company will continue to pay dividends despite not doing so in 2021 on the directive of the Bank of Uganda in light of COVID-19 disruptions.
The Company says it has over the years paid dividends.
The issue of dividend came up yesterday during the company’s 57th Annual General Meeting at Serena Hotel in Kampala.
DFCU General Manager George Ochom, explained that “While the Directors are cautiously optimistic about economic recovery, the recent economic trends point to a possible prolonged delay in the recovery.”
He added: “In order to prepare the Company for any adverse effects resulting from economic shocks, the Board of Directors are not proposing payment of dividends for the year ended 31st December 2021.”
However, Ochom said, “this position will be closely monitored, and Shareholders advised on any developments.”
According to Ochom, the Group has over the years paid dividends and will continue to.
Other shareholders were concerned about what they termed as underperformance but the DFCU Chief Executive Officer, Mathias Katamba, noted that the Bank had a good revenue growth in 2021 with total revenues growing by 21%.
“So, the topline profit was good. It was among the highest in mainstream. The cost income ratio reduced from 63% to 50% and all these parameters, they demonstrate strength in our underlying performance. The underlying performance of the company was strong. Our revenue growth was strong, efficient and the company continued to improve. Our cost management improved significantly and that will continue to improve and the biggest setback was the impairment on loans in particular sectors where we have been quiet significant players over a long period of time,” Katamba explained.
So, he said, “the key thing now and going forward is ensure that our recovery is effective to try and recoup the provisions we have made but also, we continue to diversify business through our new strategy which now anchors under 3 core segments which is retail personal banking, retail business banking and corporate banking and in that way, we reduce the concentration risk and improve the growth and retail side of our business and do a wide distribution and network.”
According to Katamba, dfcu Bank is “moving forward to make further significant investments in technology and drive realization for the numbers to make the company much more customer focused (convenience, something which customers are looking for.”
To this, Katamba said, “it’s really that diversification, following the execution of our strategy, making sure that our digital channels are working and are available and just improving the risk management, generally within the business going forward particular in the area of credit risk.”