Dfcu top management and members of the Board in a group photo after the AGM
dfcu Bank Chief Executive Officer, Charles Mudiwa, has said the bank is focused on driving the execution of the “Fired-Up” strategy which is hinged on “who we are as an institution – our values and culture and how we uphold them.”
“The execution efforts of the strategy will focus on re-engineering the company to drive transformation through operational efficiency and automation. The goal is to drive a dynamic shift in organisational culture and deliver a more customer-centric organisation, leveraging technology and data-driven insights to create seamless user experiences. On the sustainability front, the Agribusiness Development Centre (ADC) will have its mandate and scope broadened as it transitions from an exclusive focus on the agriculture sector to becoming a full-fledged Foundation,” said Mudiwa.
He made the remarks during dfcu’s 59th Annual General Meeting held Thursday at Hotel Africana.
dfcu Bank, a subsidiary of dfcu Limited recorded 11% improvement in net profit after tax from Shs31bn in 2022 to Shs34bn in 2023.
Mudiwa attributed the growth to the resilience of the Bank and the ability to maintain a strong capital position cushioning against the key risks.
Mudiwa also revealed that the Bank’s total capital ratio improved by 3.2% to 29.5% in 2023, which is well above the regulatory minimum of 12% as prescribed by the Financial Institutions Act.
“The concerted efforts put in place to manage credit risk during the year led to the reduction of impairment of loans and advances to customers by 6% from Shs88bn in 2022 to Shs83bn in 2023. The total number of borrowers continued to grow, increasing by 19% as the Bank expanded its credit outreach to more households across the country. Given the dynamic environment, the Bank continues to exercise a cautious approach to credit extension. The company recorded a 2% increase in total interest income from Shs345bn to Shs350bn and a 12% increase in non-funded income from Shs86Bn to Shs97bn,” added Mudiwa.
These are attributed to significant recovery on the fair value asset due to the revamped recovery strategy.
According to Mudiwa, 103% increase in the total number of customers was mainly driven by the Bank’s active participation in the Parish Development Model (PDM) program where the government is a key partner and a 17% increase in transaction volumes, and 33% uptake of digital banking offerings, especially mobile banking.
The Bank’s Interest expense also increased by 24% from Shs74bn to Shs92bn, driven by a rising cost of deposits, with the industry time average time deposits rate going up by 1.2% from 10.7% in 2022 to 11.9% in 2023.
“Our footprint continues to grow across the country and includes a network of 54 branches spread across the country, 1,015 Agents and 78 deposit taking ATMs, all of which offer added convenience to our customers,” said Mudiwa.
Speaking at the same event, Jimmy. D. Mugerwa, the Board Chairman of dfcu Ltd, told shareholders that “the group took deliberate steps to tap into activity in the affected sectors while growing our investment in the government securities portfolio by 4%. Through a 6% reduction in the impairment of loans and advances to customers and a 4% uplift in operating income, we delivered a net profit after tax of Shs28.7 billion.”
“DFCU remains deeply committed to uplifting the communities we serve. Our 54-branch network undertook impactful local initiatives, complemented by transformative programs like Women in Business, Rising Woman, and the SME Business Accelerator. The Agribusiness Development Centre (ADC), whose focus is supporting and building the capacity of Agribusinesses that have the potential to contribute to the overall agriculture value chain have made strides in fostering the bankability of Farmer Based Organisations (FBOs), Small and Medium Enterprises (SMEs) and Savings and Credit Cooperatives (SACCOs). Over 28,000 individuals and entities have benefited from ADC’s work,” said Mugerwa.
Mugerwa also reminded the shareholders of the group’s 60 years of changing lives and transforming businesses in Uganda.
“We are filled with immense pride and excitement as we celebrate DFCU’s 60th anniversary. This milestone is a testament to our resilience and enduring positive impact on customers, stakeholders, and Uganda’s socio-economic fabric. As we reminisce over the 60-year milestone, the company is also proud to celebrate 20 years since it was listed on the Uganda Securities Exchange. The listing allowed close to 4,000 Ugandan investors to buy shares and own part of the company, which continues to pay dividends to them,” he added.
During the year, Mugerwa said that dfcu Bank Limited achieved another milestone by raising its share capital to the new statutory limit of Shs 150 billion well in advance of the June 2024 deadline and without calling on its shareholders for additional capital.
