dcfu Bank net profit drops by nearly 50 pc in 2018

March 27, 2019 in Business, Companies, Finance, Financial Services by Editor

Bank officials say total assets reduced by five percent from UGX 3.1 trillion to UGX 2.9 trillion due to repayment of borrowed funds and subordinated debt.

March 27—It has been a less than gratifying 2018 for dfcu Bank as profit after tax fell by nearly 50 pc from the UGX 106 billion ($28 million) generated in 2017 to UGX 60 billion ($16 million). Assets slipped from UGX 3 trillion ($805 million) to UGX 2.9 trillion.

Earnings per share have been pegged at UGX 81.41 compared to the UGX 189.33 payable the previous year. Shareholders of Uganda’s second biggest financial institution will be eager for explanations at the next AGM scheduled for June 13, 2019. But top management, now led by Mathias Katamba after the exit of Juma Kisaame earlier this year, can point to the integration costs of taking on former Crane Bank operations and the need to stay competitive with new technology.

According to the published results circulated today, loans and advances grew by 5 percent as the bank focused on the asset quality to consolidate its book, which resulted in reduction in the impairment expenses by 61 pc from UGX 49 billion to UGX 19 billion.

In an accompanying statement the bank said, ‘Customer deposits remained stable at UGX 1.9 trillion as we focused on our strategy of growing the current and savings deposits that are a more cost-effective source of funding, which resulted in a 11 pc reduction in the interest expense from UGX 88 billion to UGX 78 billion’.

Total assets reduced by 5 percent from UGX 3.1 trillion to UGX 2.9 trillion due to repayment of borrowed funds and subordinated debt. This resulted in a 39 pc reduction in dfcu Bank’s interest expenses from UGX 44 billion to UGX 27 billion.

‘Non-funded income in terms of fees and commissions grew by 29 pc from UGX 40 billion to  UGX 51 billion as we continue to harness the benefits of the investments in technology and growth in the customer base.T he Group posted total profit after tax of UGX 60.9 billion, which was lower than the previous year that included a one-off item of UGX 119 billion which arose from the business combination,’ the statement reads in part.