Long serving board chairperson Elly Karuhanga retires in September Kampala, Uganda | ISAAC KHISA | dfcu Bank has cut dividend payout to its shareholders by 65.5% to Shs17.83 per share, equivalent to Shs 13bn for the year ended Dec.2020 to preserve more capital for any uncertainties that would occur owed to effects of the coronavirus pandemic.
Listed on the Uganda Securities Exchange, dfcu had initially proposed dividend payout of Shs 50.33 per share, equivalent to Shs 37.7bn to its shareholders.
“Due to the pandemic, there’s a lot of volatility,” said Kate Kiiza, Chief Commercial Officer at dfcu Bank told shareholders during the 56th Annual General Meeting (AGM) held on Thursday. “There’s need to be fully prepared for the uncertain times in future and preserve more capital.”
dfcu did not pay dividends for 2019 in response to the Bank of Uganda’s directive to retain more capital as a result of effects of COVID-19. However, the 2020 dividend payout is far lower than the Shs24.69bn paid in 2018.
dfcu recorded sharp drop in profit
dfcu recorded a 67% drop in profit after tax to Shs 24bn last year due to the negative impact of provisions for loans and advances, and impairment of the financial asset as a result of COVID-19 and Non-Performing Loans acquired from the defunct Crane Bank.
The company’s net loan loss provisions increased by 107% from Shs 14bn in 2019 to Shs 30bn in 2020 owed to negative impact of Covid-19 on its customers’ business operations.
Moreover, there was also a higher than anticipated impairment charge on the financial asset of Shs 50bn in 2020 compared to Shs 10bn in the previous year.
However, the lenders’ deposit base grew by 27% from Shs 2. 039tn to Shs 2.595tn during the same period under review. The asset base increased by 18% from Shs 2.958tn to Shs 3.499tn, upheld by strong growth in liquid assets and loans and advances.
dfcu, meanwhile, remains well capitalized with capital ratios of 19.34% and 20.94% for tier one and two capital respectively. Liquidity position remained strong with an average liquid assets ratio above 35%.
Karuhanga opts for retirement Meanwhile, Elly Karuhanga, the current dfcu Bank board chairperson has opted for retirement effective Sept.30. This comes a year since he resigned as chairman of the Uganda Chamber of Mines and Petroleum (UCMP). Karuhanga was re-elected last year as the bank’s board chairperson for another 2-year term.He thanked dfcu bank shareholders for entrusting […]