Dfcu top officials attending the Annual General meeting in Kampala this Thursday Dfcu bank’s asset base increased by 18 percent from Shs 2,958 billion to Shs 3,498 billion in 2020 despite net loan loss provisions increasing by 107 percent from Shs 14 billion in 2019 to Shs 30 billion.
The bank attributed the increase in the net loan loss provisions to the “negative impact of Covid-19 on our customers’ business operations.”
The development underscores the impact of the COVID-19 pandemic on financial institutions in Uganda.
The report by Bank of Uganda (BOU) for the year ended December 2020 showed that commercial banks registered losses totalling Shs 242.6b as a result of bad loans, with Shs 56.9b in the quarter to December 2020.
This was an increase of 46.9% from Shs 165.2b registered in 2019. The report attributes the problem to the slow economic recovery, as indicated by weak economic activity hampered by the onset of the COVID-19 pandemic, which adversely affected the income of borrowers.
During the Annual General Meeting held this Thursday, bank officials said there also was a “higher than anticipated impairment charge on the financial asset of Shs 50bn in 2020 compared to Shs 10bn in 2019 upheld by strong growth in liquid assets and loans and advances.”
Net profit after tax decreased to Shs 24 billion due to the negative impact of provisions for loans and advances, and impairment of the financial asset.
Meanwhile, dfcu said the Group’s deposit base grew by 27% from Shs 2,039 billion to Shs 2,595 billion.
The growth was as a result of both newly acquired and existing clients across the business segments. Dfcu Managing Director Mathias Katamba addressing the gathering “Management implemented a clear strategy of growing the liability base, as well as retention of the existing customer relations,” said dfcu Managing Director Mathias Katumba.
Shareholders’ funds grew by 4% from Shs 569.7 billion to Shs 592.9 billion as result of increase in retained earnings.
Net Loans and Advances to Customers grew by 15% despite a challenging year as a result of solid growth in underlying Business as the Bank continued to support customers and key sectors of the economy.Overall interest income increased by 6% from Shs 325 billion in 2019 to Shs 342 billion in 2020 due to the increase in the loans and advances and government securities.Dfcu said it remained well capitalized with capital ratios of 19.34% and 20.94% for tier one and two capital respectively.The bank […]
