DFCU Bank records 21% growth in profit for the year 2019

UGANDA – Development Finance Company of Uganda Bank Limited (DFCU Bank) has registered growth in profitability of UShs73.4 billion (US$19.43), representing a 21 per cent growth compared to UShs60.9 billion (US$16.12m) in 2018.

The DFCU financial results of 2019 show that overall, interest expense reduced by 7 per cent from UShs104.7 billion (US$27.71m) to UShs97.8 billion (US$25.89m), showing improved efficiency in the liability mix as a result of management’s effort to shed off expensive funding and concentrate more on cheaper liabilities.

Consequently, the net interest income of the company increased by 3 per cent from UShs221.1 billion (US$58.52m) to UShs227.4 billion (US$60.19m) in 2019.

Non-funded income in terms of fees and commissions grew by 28 per cent from UShs51.2 billion (US$13.5m) to UShs65.4 billion (US$17.31m) as the bank harnesses benefits of the investments in technology and growth in the customer base.

The financial results further reveal that operating expenses during the period reduced by 4 per cent from UShs202.2 billion (US$53.52m) to UShs193.1 billion (US$51.11m) showing improved operating efficiency and as result, the cost to income ratio reduced from 66.2 per cent in 2018 to 60.6 per cent in 2019.

Loans and advances grew by 10 per cent from UShs1.3 trillion (US$344.08m) to UShs1.5 trillion (US$397.02m) as a result of increased disbursements and focus on continuous monitoring of the asset quality for the entire portfolio. The increase in loans and advances was organic.

During the period, the group’s asset base increased by 1per cent from UShs2.916 trillion (US$771.8m) to UShs2.958 trillion (US$782.9m) supported by strong growth in loans and advances.

The Group’s deposit base grew by 3 per cent from UShs1.9 trillion (US$502.89m) to UShs2 trillion (US$529.36m). The company explains that growth was as a result of both newly acquired and existing clients across the business segments.

Management implemented a clear strategy of growing the liability base, as well as retention of the existing customer relations.

The shareholders’ funds grew by 9 per cent from UShs521.5 billion (US$136.03m) to UShs569.7 billion (US$150.79m) as a result of an increase in retained earnings.