dfcu Limited Tuesday released its 2019 consolidated financial results revealing a 21% growth in profitability from Shs60. 9bn in 2018 up to Shs73.4bn in 2019.
This was mainly driven by significant increase in efficiency and cost management.
Operating expenses reduced by 4% from Shs202.2billion to Shs193.1billion showing improved operating efficiency. As a result, the cost to income ratio reduced from 66.2% in 2018 to 60.6% in 2019.
Overall, interest expense reduced by 7% from Shs104.7 billion to Shs97.8 billion.
Consequently, the net interest income increased by 3% from Shs221.1billion to Shs227.4billion.
Loans and advances grew by 10% from Shs1.3 trillion to Shs1.5 trillion as a result of increased disbursements and focus on continuous monitoring of the asset quality for the entire portfolio. The increase in loans and advances was organic.
The bank’s total assets increased by 1% from Shs2.91 trillion to Shs2.95 trillion, upheld by strong growth in loans and advances.
The Group’s deposit base grew by 3% from Shs1.9 trillion to Shs2 trillion. The growth was as a result of both newly acquired and existing clients across the business segments.
Shareholders’ funds grew by 9% from Shs521.5 billion to Shs569.7 billion as result of increase in retained earnings.
Despite the performance, a dividend payout will depend on the assessment of the full impact of the global COVID-19 pandemic on the operations of the business.
“The emergence of the COVID-19 global pandemic presents a lot of uncertainty in global economies and Uganda is no exception. Nevertheless, dfcu has consistently paid a healthy dividend over the years and will continue to do so in the future,” said Elly Karuhanga the Board Chairman, dfcu Limited, of which dfcu Bank is a subsidiary company.
Commenting on the effect of the pandemic dfcu Bank’s Chief Executive Officer, Mathias Katamba (pictured) said: “We are cognizant of the ongoing global COVID-19 pandemicthat may adversely impact the operating environment bymajorly disrupting global supply chains, transport and travel. But with guidance and support from our Board, strongmanagement team and dedicated staff, we remain focused ondriving efficiency to harness institutional capabilities andgrowth.”
On factors behind the increase in profitability, Katamba said: “We focused on cutting down our operating costs by 4% from 202 Billion Shillings inDecember 2018 to 193 Billion Shillings in December 2019, in addition to reducing our funding costs by 7% in terms ofinterest expenditure from 105 Billion Shillings to 97.6 Billion giving rise to a 4% growth innet operating income from 306 Billion Shillings in December2018 to 319 Billion Shillings in December 2019. This effectively set the Bank on a solid footing to further harness institutional capabilities going forward.”
Top 5 shareholders of dfcu Limited
|Investment Fund for Developing Countries (IFU)||9.97%|
|National Social Security Fund||7.46%|
|Kimberlite Frontier Africa Master Fund||7.35%|
|SSB Russel Investment Company Plc Fund||1.93%|