Mathias Katamba, Chief Executive Officer at dfcu Bank
Dfcu has posted good financial performance in the first half of 2021 with consolidated net profit after tax increasing by 33% from Ushs29.1 Billion in June 2020 to Ushs38.8 Billion in June 2021 despite the ongoing COVID-19 pandemic.
Mathias Katamba, Chief Executive Officer at dfcu Bank, the trading subsidiary of dfcu Ltd attributed the upside in profit performance to 23% growth in net income.
“In terms of financial positions, we continued to shore up liquidity given the uncertain environment with a 2.6% increase in liquid asset holdings,” Katamba says, adding: “Due to the constricted economic activity, the Bank took a conscious approach to credit growth resulting in net loans and advances to customers reducing by 4.1% (loans and advances reduced to UShs1.66 trillion from UShs1.75 trillion).”
Customer deposits also reduced slightly to Shs2.38 trillion from Shs2.48 trillion for the period under review.
“The marginal drop in customer deposits was a result of the deliberate move to minimise the cost of funds as we continued to gradually release the expensively priced deposits,” Katamba says, adding: “On the other hand, the impact of the restrictions and slow pace of activity reflected on our customers as the provisions for loans and advances to customers increased from Ushs 8.7 Billion in June 2020 to Ushs 36.7 Billion in June 2021.”
Considering the challenges in the business environment and slow economic recovery, dfcu focused the first half of the year on maintaining an optimal balance between supporting customers to recover and financial performance. Katamba says the first half of the year has been mixed, characterized by a second wave of COVID-19 infections with new variants and the lockdown that was instituted to curb the rising pace of infections across the country and the resultant strain on the health sector.
“On a positive note, the economy continues to show signs of recovery with the GDP estimates for financial year 2020/21 closing at 3.3% which was higher than projections earlier in the year of 3.1% driven primarily by stronger household consumption. The financial year 2021/22 is expected to show even stronger growth especially if vaccinations pick up and other critical sectors of the economy are opened,” he says.
On what dfcu Bank is doing to galvanize support for customers, communities and the economy to recover, Katamba says they continue to provide relief in terms of restructures and repayment moratoriums to customers whose businesses have been impacted by the pandemic.
“More than 45% of our customers have received some form of credit relief to date.
As a mechanism to further promote access to credit for small business and households, we started deployment of our mobile loan solution to our consumer banking customers and leveraged our customer relationship management to provide new and additional funding to business customers,” he says,
He adds: “At the national level, we continued to engage with stakeholders in key sectors of the economy in the areas of Oil and Gas particularly, to promote the participation of customers in the local content component. We continue to sponsor the Best Farmer initiative which promotes the use of best practices in agribusiness in conjunction with our partners.”
He adds that the Bank also continues to support Savings groups and SACCOs (Savings and Credit Cooperative Organizations) through capacity building programs and small farmer-based groups through our Agricultural Development Centre.
“Our staff have shown that, regardless of the circumstances, they will go over and above to support our customers, communities, and one another. We are providing tailored support across our footprint to help them manage through the pandemic,” Katamba says.
Outlook
On what customers and stakeholders should expect going forward, Katamba says “Our efforts will continue to focus on driving efficiency of operations and harnessing our digital investments to sustain customer ease of doing business with us. We will also continue to play our role of ‘making more possible for our customers’ by providing much needed funding to support both individuals and business to recover. The pandemic is still with us for some time, so the health and safety of our customers and staff will continue to be a priority as well.”
