dfcu will continue to consistently pay a healthy dividend to its shareholders after posting total profit after tax of Shs 60.9 billion for the year 2018.
The second largest bank said this was lower than the previous year that included a one-off item of Shs 119 billion which arose from the business combination with Crane Bank.
dfcu’s Chief Financial Officer, Kate Kiiza said net loans and advances to customers grew by 5 percent “as we focused on the asset quality of our consolidated book, which resulted in reduction in the impairment expenses by 61 percent from Shs 49 billion to Shs 19 billion.”
Additionally, the bank’s customer deposits remained stable at Shs 1.9 trillion as dfcu focused on the strategy of growing the current and savings deposits that are a more cost effective source of funding, which resulted in a 11 percent reduction in the interest expense from Shs 88 billion to Shs 78 billion.
Total assets reduced by 5 percent from Shs 3.1 trillion to Shs 2.9 trillion due to repayment of borrowed funds and subordinated debt.
This resulted in a 39 percent reduction in the bank’s interest expense from Shs 44 billion to Shs 27 billion.
Non-funded income in terms of fees and commissions grew by 29 percent from Shs 40 billion to 51 billion as the bank continue to harness the benefits of the investments in technology and growth in the customer base.
Kiiza expressed hope that private sector credit growth, strengthening of the shilling and increased public investment will contribute to economic growth.
On his part, dfcu CEO, Mathias Katamba credited the financial performance to a versatile customer base, strategic focus on digital solutions which include the quick Banking omni-channel platform and a 24-hour operational call center that dedicated to excellent customer service.
The figures released by dfcu showed the bank remained well capitalized with the capital ratios staying within the regulatory requirements of the Central Bank.
Dfcu boasts 65 branches across the country, the second largest branch network in the industry; over 600 agents across the country; over 1,200 staff and a customer base of over 1,000,000 depositors.
Speaking earlier today in fort Portal, Bank of Uganda governor Emmanuel Tumusiime Mutebile said “today, the information we have shows that the banking sector is strong and healthy. Banks possess sufficient financial resources, and the majority, are making profits.”
Reacting on the macroeconomic operating environment, dfcu said GDP growth is expected to pick up to above 6 percent in 2018/19 supported by recovering public sector credit, strengthening of the currency and public infrastructure investments and improved agricultural performance.
The bank also observed that core inflation rose in January 2019 to 3.4 percent from 2.8 percent and remains below policy target but projections are for inflation to rise gradually to about 5 percent in 2019.
“The Shilling has been stable in the short term mainly due to export receipts, portfolio inflows and private transfers. Over the medium term, the shilling may remain volatile on account of weak current account position,” said the bank.