dfcu profit after tax up 33%

Future performance will depend on economic recovery speed

Kampala, Uganda | ISAAC KHISA | Profits at dfcu bank has increased by 33% in the first half of the year as it benefited from the rebound in the economy and surge in activities.

Listed on the Uganda Securities Exchange, the lender saw its profit after tax rise to Shs 38.8bn compared to Shs29.1bn in the same period last year.

The figures have come at a time the country’s future economic recovery remains uncertain due to the impact of the coronavirus pandemic.

“Considering the challenges in the business environment and slow economic recovery, we focused the first half of the year on maintaining an optimal balance between supporting our customers to recover and financial performance.  The extension of the credit relief program by the Central Bank enabled us to prolong the provision of relief in terms of restructures and repayment moratoriums to customers whose businesses have been impacted by the pandemic,” said the bank’s Board of Directors (BOD).

It highlighted that its pre-tax profit increased from Shs39.3bn to Shs 49.9bn during the period. Similarly, the its net income increased from Sh 144bn to Shs 177.3bn.

However, dfcu’s provisions for loans and advances to customers increased from merely Shs8.7bn to Shs36.7bn occasioned by coronavirus restrictions.

dfcu Managing Director, Mathias Katamba, said the lender will continue to provide credit relief in terms of restructures and repayment moratoriums to customers whose businesses have been impacted by the pandemic.

He said more than 45% of their customers have received some form of credit relief since last year.

“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 said.

Katamba said the lender also continues to engage stakeholders in key sectors of the economy in the areas of oil and gas to promote the participation of customers in the local content component. The country hopes to start oil production around 2024.

He said the lender will also continue to support savings groups and the Savings and Credit Cooperative organizations through capacity building programs and small farmer-based groups through its Agricultural Development Centre.

“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,” Katamba said.

“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.”

Meanwhile, shareholders of the failed lender, Crane Bank, have filed a $211million fraud suit in the United Kingdom accusing dfcu, its executives and other partnered institutions in the acquisition of its assets and some liabilities. dfcu acquired Crane Bank, now under receivership, in 2017.

However, dfcu, through their commercial defence lawyers at Ligomarc Advocates, said though they are unable to comment on the ongoing legal proceedings, ‘intend to defend the claim vigorously.’ ‘

dfcu is owned by various investors including: Arise B.V, NSSF, Kimberlite Frontier Africa Master Fund and SSB Russell Investment Company.

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