dfcu Bank, based in Kampala, Uganda, has seen a notable improvement in its financial performance during the first half of the year, with its net profit rising by 56% to Shs29.3 billion by the end of June. This growth has been primarily attributed to a decrease in loan impairment.
The bank’s financial results, disclosed on August 24, highlight consistent growth in its operations. This success can be attributed to proactive efforts in loan collection and recovery, as well as more effective management of its portfolio. These measures resulted in a significant 33% reduction in loan impairment and advances.
Additionally, dfcu Bank succeeded in expanding its customer base during this period, which contributed to a 25% increase in its non-funded income. Furthermore, the bank’s liquid assets experienced a 20% growth, reaching Shs1.9 trillion in the first half of 2023, up from Shs1.5 trillion in the same period of the previous year.
This increase in liquid assets was driven by a 2% rise in customer deposits, an 8% growth in shareholders’ equity, and a 16% decrease in loans and advances. Overall, the bank’s total assets grew from Shs3.2 trillion in the first half of 2022 to Shs3.3 trillion in the same period of 2023.
While loans and advances to customers decreased by 16% to Shs1.1 trillion in the first half of 2023, compared to Shs1.3 trillion in the same period last year, the bank managed to serve 11% more borrowers. This growth was attributed to increased lending to individuals and businesses across Uganda.
The bank’s operating expenses increased from Shs85 billion in the first half of the previous year to Shs114 billion in the same period of 2023. This increase signals a need for management to consider further spending cuts to enhance the bank’s profitability.
In terms of capitalization, dfcu Bank’s executives confirmed that the business is well-capitalized and has met the new capital requirements set by the central bank. Remarkably, this accomplishment was achieved without requiring additional capital from shareholders.
Charles M. Mudiwa, the Chief Executive Officer, expressed gratitude to the shareholders for their participation in the Annual General Meeting (AGM), which was conducted virtually. He emphasized the bank’s commitment to delivering shareholder value, which included dividend payouts after the AGM.
Beyond its financial performance, dfcu Bank continues to support Uganda’s economic growth through various initiatives, including backing national programs such as the Parish Development Model. This approach aims to stimulate economic growth at the grassroots level.
Mudiwa noted that the bank maintains a strong presence in the agri-business sector through strategic collaborations with key partners like Rabo Foundation and MasterCard. Through these alliances, dfcu Bank has facilitated financial access for smallholder farmers, supported women entrepreneurs, and accelerated the growth of small and medium enterprises.
Looking ahead, Mudiwa outlined the bank’s strategy, which revolves around its purpose of transforming lives and businesses in Uganda. The bank plans to focus on key economic sectors through specialized segments, fostering digital transformation, data-driven decision-making, and cultivating a performance-oriented culture. Mudiwa highlighted their commitment to ensuring customer and employee satisfaction, managing business risks, and sustaining strong financial performance.