dfcu bank recorded Shs61.7bn net profit in 2018, down from Shs127.6bn profit posted in 2017, Business Focus reports. According to the bank’s financial statements for the year ended December 2018 obtained by this Business website, the reduction in profit is largely attributed to slowed growth in some of the key performance parameters.
For example, loans advanced to customers increased by about 5% to Shs1.39 trillion in 2018, up from Shs1.33 trillion recorded in 2017.
“Loans and advances grew by 5% as we focused on the asset quality of our consolidated book, which resulted in reduction in the impairment expenses by 61% from Shs49 billion in 2017 to Shs19 billion in 2018,” Mathias Katamba, the dfcu bank Managing Director explained.
Customer deposits almost remained unchanged, reducing slightly to Shs1.97 trillion in 2018, from Shs1.98 trillion recorded a year earlier.
“Customer deposits remained stable as we focused on our strategy of growing the current and savings deposits that are a more cost effective source of funding, which resulted in a 11% reduction in the interest expense from Shs88 billion to Shs78 billion,” Katamba explained.
Additionally, the bank’s total assets reduced by about 5% to Shs2.88 trillion in 2018, down from Shs3.0 trillion recorded in 2017.
dfcu officials attributed the decline in total assets to repayment of borrowed funds and subordinate debt.
“This resulted in a 39% reduction in our interest expense from Shs44 billion to Shs27 billion,” the bank said.
The bank’s Non-Performing Loans (NPLs) reduced to Shs80.82bn in 2018, down from Shs96.67bn, while bad loans written off increased to Shs82.59bn in 2018, up from Shs27.2bn.
Considering the reduction in profits, proposed dividends have reduced to Shs24.69bn in 2018, down from Shs51.05bn in 2017.
Positively, the bank remains well capitalized, with Core capital standing at Shs403.9bn in 2018, up from Shs362.06bn in 2017.
Katamba (in featured photo) replaced Juma Kisaame as dfcu bank Managing Director late last year.
dfcu bank became one of the three most important banks in Uganda after acquiring certain assets and liabilities of the defunct Crane Bank.
dfcu Limited posted total comprehensive income of Shs60.8 billion in 2018, which was lower than the previous year that included what the company described as “a one off item of Shs119 billion which arose from the business combination.”
